Stuart Ullman
Footballguy
Greetings fellow geniuses, I am starting this thread to give you a little stock advice based on some speculation and observations I've made over the past few months.
Pretty much, WWE stock opened on January 2nd, 2018 at $30.80 a share. The stock typically peaks around WrestleMania season before investors sell off during the slow season.
However, something very interesting happened during the slow season this year. WWE signed a 5-year, 1 billion dollar network with the Fox Network on May 21, 2018. On this day alone, the stock price jumped from $51.80 a share to $57.67 a share, an 11.33% increase in one day. Which, makes sense when you consider that 1 billion dollars was gifted to their Accounts Receivable.
While the deal was signed on May 21, 2018 it was not publicly announced until June 27, 2018 where the stock reached an incredible $74.72 a share.
The WWE weren't done there, however, a month later it was announced that the WWE signed an estimated 450 million 10-year deal with Saudi Arabia on July 27, 2018 with the stock price reaching a staggering $85.78 a share.
Since then, WWE stock has risen to heights as high as $97.69 on September 28, 2018. Which is a 217.17% increase in less than 10 months. The rise makes sense, since WWE has added the equivalent of 1.5 billion to their Accounts Receivable over the next 10 years.
Here is where my speculation begins. I believe that WWE stock is a due for a major drop in price, most likely starting tomorrow:
1.) The stock is up approximately 200% YTD whereas the NASDAQ itself is only up 2.29%. The massive sell-offs that typically would occur with this stock, never happened. WrestleMania raised the price, then the Fox Deal came through, then the Saudi Deal came through. There are plenty of people holding stock purchased at $30 - 60 a share that are ready to lock in some profit.
2.) If you have been following the news, Saudi Arabia has recently found themselves in hot water for allegedly killing US journalist. The WWE has seen backlash from this controversy, prompting them to remove the WWE Crown Jewel event set to take place in Saudi Arabia on November 2, 2018 from their event calendar.
There is speculation that the event will be cancelled or relocated completely. If the WWE and Saudi Arabia were to break contract on this 10-year, 450 million dollar contract, it's easy to surmise that the stock could drop down to the $74.00 valuation it was at before the deal was signed. This alone would signify about 15% loss of investment.
3.) On a macro level, the CBOE Volatility Index (VIX) is at a 6 month high. For those who are unaware of what this is, this security is often known as the "fear" index. When people are fearful, things are more volatile and subject to more drastic price fluctuations.
This all makes sense because our stock market itself is also at a 6 month low (they're inverses of each other).
4.) The Saudi Arabian stock exchange dropped 7% among all this controversy. As we know, the Saudi Arabia is deeply tied to oil and the price per barrel dropped in direct correlation to the Saudi Arabian stock market. This of course, creates more uncertainty and volatility.
5.) All of these developments happened over the past few days, aka, the weekend. As in, our stock market was closed. The effects of all these developments are still unknown.
6.) Midterm elections in November and fear of a Non-Republican majority create more fear and uncertainty.
If you've made it this far, give yourself a pat on the back as I'm about to get to my point. I firmly believe that both WWE stock and the US Stock Market will open in the red tomorrow.
The WWE has seen such sustained growth without giveback and is so deeply intwined with Saudi Arabia that it's a matter of "how much" and not "if" the stock will take a hit. We have people holding shares purchased at $30 that they are liable to sell off for $85 a share before the Saudi Arabia and US Stock Market fear cause massive sell-offs.
This creates a great short opportunity, but what price range are we looking at?
Well first of all, the stock is not worth the $85.00 - 90.00 it currently trades at. It's a bubble, so if you can short at that price do it quickly. Prior to the Saudi deal, the stock was trading at about $75.00 a share, shorting at that price offers opportunity as well. How low do I see it going?
For me, I believe an accurate and fair WWE stock price as reflected by the price when the 5-year 1 billion dollar Fox Network deal was signed is anywhere from $50-60 a share. I feel like the stock can comfortably be shorted from its current position of $85.55 to $50.00 a share while a lot of this begins to correct itself and people take their profits.
If those estimates are correct, you can realize an approximate 70% gain. Anything lower than $50.00 a share and people are just being hysterical and you should then begin to BUY hand over fist.
How long should you short? Well, for those who follow the product the "Road to WrestleMania" begins at the Royal Rumble which is in January.
I'd say, short until Christmas, sell off, and reevaluate the price going into the 2019 fiscal year. The stock typically rises from January to April (WrestleMania season).
Let's see what tomorrow and the next week brings!
Pretty much, WWE stock opened on January 2nd, 2018 at $30.80 a share. The stock typically peaks around WrestleMania season before investors sell off during the slow season.
However, something very interesting happened during the slow season this year. WWE signed a 5-year, 1 billion dollar network with the Fox Network on May 21, 2018. On this day alone, the stock price jumped from $51.80 a share to $57.67 a share, an 11.33% increase in one day. Which, makes sense when you consider that 1 billion dollars was gifted to their Accounts Receivable.
While the deal was signed on May 21, 2018 it was not publicly announced until June 27, 2018 where the stock reached an incredible $74.72 a share.
The WWE weren't done there, however, a month later it was announced that the WWE signed an estimated 450 million 10-year deal with Saudi Arabia on July 27, 2018 with the stock price reaching a staggering $85.78 a share.
Since then, WWE stock has risen to heights as high as $97.69 on September 28, 2018. Which is a 217.17% increase in less than 10 months. The rise makes sense, since WWE has added the equivalent of 1.5 billion to their Accounts Receivable over the next 10 years.
Here is where my speculation begins. I believe that WWE stock is a due for a major drop in price, most likely starting tomorrow:
1.) The stock is up approximately 200% YTD whereas the NASDAQ itself is only up 2.29%. The massive sell-offs that typically would occur with this stock, never happened. WrestleMania raised the price, then the Fox Deal came through, then the Saudi Deal came through. There are plenty of people holding stock purchased at $30 - 60 a share that are ready to lock in some profit.
2.) If you have been following the news, Saudi Arabia has recently found themselves in hot water for allegedly killing US journalist. The WWE has seen backlash from this controversy, prompting them to remove the WWE Crown Jewel event set to take place in Saudi Arabia on November 2, 2018 from their event calendar.
There is speculation that the event will be cancelled or relocated completely. If the WWE and Saudi Arabia were to break contract on this 10-year, 450 million dollar contract, it's easy to surmise that the stock could drop down to the $74.00 valuation it was at before the deal was signed. This alone would signify about 15% loss of investment.
3.) On a macro level, the CBOE Volatility Index (VIX) is at a 6 month high. For those who are unaware of what this is, this security is often known as the "fear" index. When people are fearful, things are more volatile and subject to more drastic price fluctuations.
This all makes sense because our stock market itself is also at a 6 month low (they're inverses of each other).
4.) The Saudi Arabian stock exchange dropped 7% among all this controversy. As we know, the Saudi Arabia is deeply tied to oil and the price per barrel dropped in direct correlation to the Saudi Arabian stock market. This of course, creates more uncertainty and volatility.
5.) All of these developments happened over the past few days, aka, the weekend. As in, our stock market was closed. The effects of all these developments are still unknown.
6.) Midterm elections in November and fear of a Non-Republican majority create more fear and uncertainty.
If you've made it this far, give yourself a pat on the back as I'm about to get to my point. I firmly believe that both WWE stock and the US Stock Market will open in the red tomorrow.
The WWE has seen such sustained growth without giveback and is so deeply intwined with Saudi Arabia that it's a matter of "how much" and not "if" the stock will take a hit. We have people holding shares purchased at $30 that they are liable to sell off for $85 a share before the Saudi Arabia and US Stock Market fear cause massive sell-offs.
This creates a great short opportunity, but what price range are we looking at?
Well first of all, the stock is not worth the $85.00 - 90.00 it currently trades at. It's a bubble, so if you can short at that price do it quickly. Prior to the Saudi deal, the stock was trading at about $75.00 a share, shorting at that price offers opportunity as well. How low do I see it going?
For me, I believe an accurate and fair WWE stock price as reflected by the price when the 5-year 1 billion dollar Fox Network deal was signed is anywhere from $50-60 a share. I feel like the stock can comfortably be shorted from its current position of $85.55 to $50.00 a share while a lot of this begins to correct itself and people take their profits.
If those estimates are correct, you can realize an approximate 70% gain. Anything lower than $50.00 a share and people are just being hysterical and you should then begin to BUY hand over fist.
How long should you short? Well, for those who follow the product the "Road to WrestleMania" begins at the Royal Rumble which is in January.
I'd say, short until Christmas, sell off, and reevaluate the price going into the 2019 fiscal year. The stock typically rises from January to April (WrestleMania season).
Let's see what tomorrow and the next week brings!
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