WWE and CEO Vince McMahon keep racking up W’s while piledriving Wall Street with a vengeance.
Just for some context: That’s a 3.7X vs. their $1.7B market cap average over the past five years—and a whopping 8.6X above their five-year low of $728.39M.
So why’s the stock’s so high, #WealthGANG? Let’s take a look.
Record Q2 growth
In Q2, WWE reported revenue of $281.6M—a 31% year-over-year jump and 18% above analyst estimates ($239.5M). WWE’s paid subscribers rose 10% to 1.8M, which were in line with earlier projections.
On the digital side, WWE’s digital video views rose 58% in Q2. The total consumption, in terms of digital content, rose 71% to 509M hours, showing a healthy appetite for bodyslams and suplexes.
Crazy lucrative TV deals…
What really helped send the stock surging was McMahon’s ability to score lucrative TV deals with Fox and Comcast/NBC Universal. According to US News, the new deals came out to 3.6 times the value of WWE’s previous TV deal for WWE’s weekly shows “Monday Night Raw” and “SmackDown Live.”
WWE stock skyrocketing again, after news that Fox has agreed to pay to broadcast SmackDown Live. pic.twitter.com/Bl6mcTNFS4
— Darren Rovell (@darrenrovell) May 21, 2018
In other words. The wrestling franchise will increase TV revenues from $270M to over $600M. Just let that simmer for a bit…
Female wrestling viewers?!
WWE’s traditionally focused on male wrestlers, skewing to their male-dominated audience. But that looks like it could change.
Led by former UFC superstar and current WWE Women’s champ Ronda Rousey, the company is staging its first-ever PPV this year in an ambitious attempt to broaden their female audience base.
This event will include over 50 female wrestlers from the “Raw” and “SmackDown” franchises.
— WWE (@WWE) July 24, 2018
— Vickie Guerrero (@VickieGuerrero) July 24, 2018
It’s that feeling where you can’t stop smiling. Incredibly honored and ready to represent the hearts of all little girls worldwide who’ve always wanted to follow their dreams. #Evolution
— Bayley (@itsBayleyWWE) July 24, 2018
Can they keep it up in Q3?
If you ask Wall Street analysts? Then the answer is yes. The suits down at the Street say that these deals will trigger long-term revenue, earnings, and free cash flow growth for WWE.
Specifically, as things stand now, the company will raise its OIBDA (operating income before depreciation and amortization) from $150M to between $160M and $170M for 2018.
For Q3, WWE has an estimated subscriber count of 1.67M with adjusted OIBDA between $30-34M. Not too shabby for a family business. Let’s give a three-count to good ol’ Vinnie Mac, shall we?
Crypto Expert: Bitcoin Could Reach A Staggering $50k Next Year
Just when you thought cryptocurrencies had bottomed out, the market was hit by yet another crash last week. Bitcoin’s value plummeted 14% in under 24 hours last week, dropping to below $5k, a new low for the cryptocurrency in over a year.
In fact, this has been one of the biggest bear market crashes in the history of Bitcoin. In a period of about 300 days, Bitcoin has slumped over 80% from $19.6k to about $3.7k. Back in 2011, the cryptocurrency nosedived almost 97% to $2.2, shedding nearly all its value.
Marius Kramer, touted as a cryptocurrency expert, highlighted that the correction could be triggered by investors who entered the market at below $5k, liquidating their investments in the cryptocurrency to avoid losing their initial investment – eventually driving its price down further.
Why is Bitcoin plummeting?
Despite critics, Kramer claims that the recent pullback was engineered by crypto whales who manipulate prices regularly. They have driven the crypto market lower, where the Bitcoin reached a 14-month low of $3.5k.
The speculative movements in the cryptocurrency market may result in significant losses for investors and could cause the market to tank. Most often, crypto whales use this move to re-enter the market at a much cheaper price.
Despite the catastrophic crypto developments of late, Kramer claims the downturn is simply the calm before the storm.
According to Kramer, Bitcoin might touch $50k by the end of the next bull run, estimated to be six months away. “I predict the bull market to start in late September, reaching a Bitcoin price of $20,000 throughout October, November and reach its peak of $50,000-$100,000 in December, January or even $150,000 with a bit of luck,” he wrote.
Bitcoin has risen by an average of 17x in every bull run. With the cryptocurrency trading at $4k per coin, a 17X return — the price might touch $68k. However, with the next bull run at least six months away, the market might well be choppy heading into the end of 2018.
Bitcoin price prediction
Crypto experts believe that the next rally will begin around Jan. 24, 2019, which is the estimated launch date of BAKKT – a trading platform for digital assets that is set to be launched by NYSE owner, Intercontinental Exchange (ICE).
Kramer expects Bitcoin’s price to rise to $10k around this time. He has also predicted a pullback to around $6k shortly after its rise.
Here’s a timeline of Kramer’s forecast for the cryptocurrency.
- November 2018: Bitcoin will move back and forth between $4k and $4.8k
- December. 2018: Price will touch $6k by Dec.10 and $8k by end of 2018.
- January 2019: Price picks up momentum with the upcoming BAKKT launch and reaches $12k by Jan. 24. It then gets dumped to $8k
- February and March 2019: Price bounces between $8k and $10k
- April 2019: Price crosses $12k again
- May-December 2019: Price may touch an all-time high and reach $50k with several blockchain and tokens showing users numerous technology applications.
If You Invested $10,400 In WWE In ’99, You’d Be A Millionaire By Now
Earlier this year, we looked at WWE’s 4x returns in the first nine months of 2018. This stock has been crushing it on the stock exchange and more than quadrupled in value.
Though the recent pullback impacted investor returns slightly, it has still gained a staggering 142% this year.
So what if you had bet on The Rock and Stone Cold Steve Austin way back in 1999? That was the year WWE went public. What if you put aside $200/week and invested it in the WWE stock?
Your investment would be worth $1M today
Yes, your $200/week investment for the last 19 years in WWE would have made you a millionaire. However, just like any other stock, WWE has had its share of ups and downs.
In December 1999, the stock was trading just shy of $18 a share. Over the next four years, it fell to $11. Though it rose over the next couple of years, the stock slipped again to the $10 mark around the end of 2011.
WWE shares only began its staggering bull run by the end of 2014, where the stock rose from $14 to its current price of $73.6. The stock touched an all-time high of $97.69 earlier this year.
Are these returns impressive?
What if you had invested in WWE when its IPO (initial public offering) was launched in 1999? A $200/week investment amounts to an annual investment of $10.4k. This then amounts to just over $200k over the next 19 years.
With a payback of $1M, the annual rate of return is 16%. Is this enough for the amount of risk undertaken?
Despite the $1M tag it promises, any other major index or alternative investment vehicle such as REITs would have generated similar returns with a far lower risk exposure.
Imagine an investor who had actually invested during the IPO. He would have had to wait for 16 long years just to break even.
What’s the way forward for WWE investors?
WWE’s traditionally focused on male wrestlers, skewing to their male-dominated audience. But it looks like that could change.
Led by former UFC superstar and current WWE Women’s champ Ronda Rousey, the company has staged its first-ever PPV this year in an ambitious attempt to broaden their female audience base.
This event included over 50 female wrestlers from the “Raw” and “SmackDown” franchises.
Wall Street estimates WWE’s sales to rise by 60% over the next two years to $1.27B, up from $800M in 2017. With rapidly improving profit margins, earnings are also expected to grow at a significant 71% over the next five years.
In fact, WWE’s net margin is expected to rise from a mere 4.1% in 2017 to 22% in 2020.
Though WWE’s stock lost over 25% in market value since October this year, analysts are again betting big on them.
Cannabis Scorecard: Top 5 Marijuana Stocks To Invest In
Marijuana stocks have been pretty volatile over the last two months. The stocks were in a spectacular bull run a few months before Canada legalized cannabis for recreational use.
The downfall in the second half of October saw investor capital nosedive substantially. This was a classic case of “Buy the rumor, sell the news” kind of an event.
How are top marijuana stocks performing? Did they recover investor losses or did they drop further? Here’s our scorecard on the top five pot stocks.
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