WWE stock has continued to fall as a result of Saudi Arabia’s Public Investment Fund’s (PIF) acquisition of a minority stake in the PFL (Professional Fighters League).
The PFL announced on Wednesday that it had sold a minority stake in its company to SRJ Sports Investments, a company formed by the Saudi PIF. The PFL will receive a $100 million investment from SRJ. The agreement includes significant PFL expansion, such as “Super Fight” pay-per-view events in the Kingdom of Saudi Arabia, as well as the launch of a PFL MENA (Middle East & North Africa) league, which they hope to have up and running by the second quarter of 2024. According to the press release, the investment will help sign “top talent and star fighters,” as well as accelerate global expansion.
On Wednesday, WWE stock opened at $115.47, but by the end of the day, it had fallen to $110.03. The stock opened today at $110.05, but it has dropped nearly all day and is now trading at $95.61, down 13.12%. As of this writing, the low was $93.93.
Endeavor stock is also down today. The stock opened at $24.27 but is now down to $21.84, or 9.57%, as of this writing.
For the most part, MMA has existed outside of the WWE universe, but with Endeavor merging WWE and UFC as TKO in the coming weeks, it will become a part of the overall business. Despite UFC’s market dominance over PFL, the stock’s drop this week demonstrates how investors are reacting to significant money being invested in a TKO competitor.
Wolfe Wolfe Research stock analyst Peter Supino wrote about how the PIF investment may affect WWE/UFC, according to SeekingAlpha.
“While there is room for all to succeed in the growing MMA market, PIF backing augurs poorly for WWE and UFC’s medium/long term talent costs,” wrote Supino, who has an outperform rating and a $137 price target on WWE. “We think PFL’s accelerating investment plans represent a new overhang on WWE’s (and soon TKO’s) valuation multiple.”
Curry Baker, a stock analyst at Guggenheim, believes the Saudi investment in PFL will not be a “game changer” for WWE or Endeavor.
“Bottomline: We do not view this as a game changer relative to the UFC’s MMA dominance,” wrote Baker, who has buy ratings on WWE and Endeavor. “In our view, the investment is not material enough to allow PFL to compete in depth of champions or across weight classes with the UFC or start developing a monetization ecosystem to sustainably compete against the UFC.”
Baker stated that he is still optimistic about the upcoming WWE-UFC merger.
PFL is determined to compete with the UFC, and they expect YouTuber-turned-boxer Jake Paul to fight on one of their shows in 2024, as well as former UFC Heavyweight Champion Francis Ngannou, who signed a historic multi-fight PFL contract to fight MMA this past May after his UFC contract expired in December while still champion. Ngannou, who is scheduled to fight Tyson Fury on October 28 in Saudi Arabia, is also a member of the PFL global advisory board. At the time of his signing, it was also announced that he would be an equity owner and chairman of a planned PFL Africa league.
