What Will Happen to World Wrestling Entertainment (WWE) After Merger?
Merion Road Capital, an investment advisor, released its second-quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, Merion Road Small Cap Fund returned 5.2% compared to a 5.3% return for the Russell 2000 Index and 2.1% for the Barclay Hedge Fund Index. Furthermore, MRCM Long Only Large Cap returned 13.4% compared to an 8.7% return for the S&P 500 Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Merion Road Capital highlighted stocks like World Wrestling Entertainment, Inc. (NYSE:WWE) in the second quarter 2023 investor letter. Headquartered in Stamford, Connecticut, World Wrestling Entertainment, Inc. (NYSE:WWE) is a media and entertainment company. On July 18, 2023, World Wrestling Entertainment, Inc. (NYSE:WWE) stock closed at $106.73 per share. One-month return of World Wrestling Entertainment, Inc. (NYSE:WWE) was 5.35%, and its shares gained 61.05% of their value over the last 52 weeks. World Wrestling Entertainment, Inc. (NYSE:WWE) has a market capitalization of $7.952 billion.
Merion Road Capital made the following comment about World Wrestling Entertainment, Inc. (NYSE:WWE) in its second quarter 2023 investor letter:
"Earlier this year EDR announced that it would merge the UFC with the World Wrestling Entertainment, Inc. (NYSE:WWE) to form a new publicly traded company called TKO Group Holdings (“TKO”). From a business perspective this makes a ton of sense as EDR will assume management and control the vote with 51%. While Vince McMahan has created tremendous value at WWE, he has always been a polarizing figure and more recently has faced sexual misconduct allegations. With WWE television rights deals coming due next year it makes sense to bring a proven industry leader like Emanuel to the helm. Furthermore, EDR should have strong negotiating power by combining the WWE with the UFC, an increasing popular and mainstream sport. Given that WWE is currently a publicly traded company, we already have a public mark on TKO. At 16x EBITDA TKO seems to be fairly priced, perhaps at a small discount. If you believe that the value of live sports will continue to grow, which I do, then this should be a nice investment over time. It still seems like early innings for UFC growth and there is the potential for EDR to improve monetization at WWE. For instance, Emanuel is on record saying that the rate card for SmackDown is 30% cheaper than the rest of the Friday night lineup."
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World Wrestling Entertainment, Inc. (NYSE:WWE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held World Wrestling Entertainment, Inc. (NYSE:WWE) at the end of first quarter which was 32 in the previous quarter.
We discussed World Wrestling Entertainment, Inc. (NYSE:WWE) in another article and shared Aristotle Small Cap Equity Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
