WWE, isn't that that the industry where grown men fondle each other for a living? Yes, yes it is. They are listed on the New York Stock Exchange and have been under the radar for a while despite all they have going for them coming into this week.
Part 1: Collectables
As you read this, World Wrestling Entertainment is holding their 37th annual WrestleMania event over this weekend from Saturday to Sunday. What makes this one different? Well for one, it’s the first event to have ticketed fans in attendance since the start of COVID. However, I'm more interested in their newly acquired money printer.
Enter the world of collectables: Where tweets go for $2.5 million, pixels sell for millions, and your local mailman is scrambling to sell their farts as collectables for $400 a piece. The NBA was quick to take advantage of this craze, selling a collectable of lebron james for $200,000 and has seen $230 million spent in trading on their platform.
What's the profit margin on something like this? What could be the cost of creating these pixels? As you probably guessed, it's an unsurprising near 100% profit margin. Collectables are making a comeback and WWE has been quick to notice. They have for the first time released a set of them this weekend to accompany WrestleMania 37. As I write this, their Silver Card have sold out at a total price tag of $37,000. The Gold currently has a bid of over $13,000. Lastly, Platinum has a whopping $100,000 bid with 4 hours left to go.
This marks only the beginning of something that will grow to a multimillion dollar revenue stream for WWE. Collectables sell, and when you have such a cult following as the WWE crowd, there's no shortage of people willing to pay big money for ownership. The media has been covering various sales recently, and we could see media attention in the upcoming week once the sales are closed out tonight.
Part 2: Reopening
In 2019, WWE had 310 live shows with generally sold out crowds. In 2020, they had 42. Q4 earnings fell 26% from Q4 2019. Revenue was 238.2 million, EPS of 16 cents. Pretty well below expectations. Now, that shouldn't be all that shocking, nobody could go see the shows. 2021 will tell a different story. This weekend’s Wrestlemania 37 is the first event to have ticketed fans in attendance since COVID-19 started. The company has announced a sell out crowd of 25,675 fans in attendance for Wrestlemania 37, and the crowds will only get larger from here. It is already rumored that Wrestlemania 69 is set to take place on Mars.
Putting aside the obvious upcoming growth, WWE has already seen a year over year increase in operating income to 332.5 million. A near 74% increase from 2019. All of that with COVID, how could that be? The bulk of that increase is coming from rises in content fees. WWE knows what they are doing. They are smart with their money, and are ready to slingshot into orbit with old(Live Audiences) and new(collectables) revenue streams just now coming into play.
Which brings me to my next point. WWE has been in an agreement with Saudi Arabia to do two shows per year. The cost is $50 million per show. These shows didn't happen in 2020 and WWE was not paid their due $100 million. Instead, WWE has extended the contract until shows can resume and this agreement lasts for ten years.
Now, $100 million doesn't seem like a lot in the context of a company with a 4B market cap, but considering that WWE raised its operating income by nearly 74 percent to 332.5 million WITHOUT the expected $100 million from the Saudi's is nothing short of impressive. How can a company that should have been held down so much during COVID just keep prospering?
Part 3: Shorts
I know what most of you are probably thinking. "GME first" or "ItS hEaViLy ShOrTeD", but I just couldn't leave this one out. Nearly 20% of the float is short with 7 days to cover. This is a prime example of a stock that is turning everything around and is about to go ballistic in terms of revenue. Now I'm not saying a squeeze is imminent, but it’s not out of the realm of possibility. With all the news and new revenue, I see many exiting their positions this upcoming week, gradually driving the price higher. This is a stock that has hardly been touched by retail investors and has 40% insider ownership, so the possibilities are endless.
Disclaimer: I’m a retard just like anyone else on here so obviously do your own research before jumping in.
(read the entire post, its a shit tldr)TLDR: WWE is taking full advantage of the collectable craze and their cult following this weekend as they release their first collectables, with bids already at $100,000. They just keep financially prospering in a time when they should be suffering. 2020 was their most profitable year in WWE history despite no live audiences. This weekend’s Wrestlemania is the first show to bring in a live audience since COVID started, selling out and bringing in over 25,000 fans, and this is just the beginning. Revenue is about to explode from live shows, collectables, and reopening. The cherry on top is the 20% short that is going to send this to the stratosphere this week.
Positions: WWE shares and $5k worth of 4/16 60 strike calls in my IRA, individual, and RH play account.
Edit:
Edit:Update: WWE collectables just closed out. Everything has been sold out
SalesPlatinum: 100k
Gold: 27k
Silver: 37k
Bronze Retro: 90.7k
Bronze Modern: 66.1k
Total Profit: $320,000