WWE stock hits 52-week high, defying market trends, in aftermath of McMahon scandal

WWE is defying broader market trends this year.

The company’s stock is up more than 50% in 2022, hitting a 52-week high Monday, and trading at levels it hasn’t seen since summer 2019. The S&P 500, by comparison, is down more than 20% this year.

The stock’s strong performance this year occurred as WWE’s live wrestling events business came roaring back after months of Covid restrictions and the company increasingly became the subject of sale talks. The stock continued to do well after WWE’s longtime leader and biggest shareholder, Vince McMahon, retired from the company over the summer in a cloud of scandal.

Shares of WWE were effectively flat Monday after hitting $76.90. The company’s market capitalization is more than $5.6 billion.

Industry insiders believe WWE could be an acquisition target. A deal could come before the company’s next U.S. TV rights renewal — likely to be announced in mid-2023. WWE’s current U.S. streaming deal with NBCUniversal’s Peacock expires in 2026.

Analyst John Healy of Northcoast Research, who covers WWE, sees the stock’s success as a confluence of successful ratings, upcoming media deal opportunities and the speculation about a possible acquisition.

“That speculation has been going on for a long time, and I think will always be around this company given the unique asset that it is and the ownership structure,” Healy told CNBC on Monday.

He also noted that WWE is relatively insulated from consumer trends, saying that “two-thirds of the revenue is coming from locked-in relationships” with media companies. Given a highly saturated media market, Healy expects high bidding for the rights to “Raw” and “Smackdown,” which are set to be renegotiated in the coming year.

source:  cnbc.com