I’ve been looking forward to writing this piece. Professional wrestling is hot. It is a great time to be a wrestling fan. WWE are the big boys, but you have great stuff coming from AEW, NJPW, ROH, and Impact wrestling just to name a few wrestling promotions. 

 

Quick plug: Do you live in Vancouver or the Lower Mainland and are a wrestling fan? Well check out Nation Extreme Wrestling (NEW), Vancouver’s newest independent promotion. The first show on September 11th is already sold out, but a matinee show is up!

 

 

I’ve been a wrestling fan growing up. Maybe it’s because of my East Indian background. My father told me when he was in India as a young man, the whole alley would come to his place because he would find tape cassettes (remember those things?) of Hulk Hogan and Andre the Giant matches. But honestly I think it was my cousins who got me into wrestling back in the WWF days.

 

The good ol times. The attitude era. Storylines that would definitely get the cancel culture treatment today. And then, WWE, as it’s now called, went PG-13. A shift to a younger audience was their thing.

 

The problem was that wrestling fans like me, who enjoyed wrestling in our teens, weren’t too interested in the project. This led to a change in WWE and how they delivered their storylines by a bit. Swearing slowly came back, and so did the blood.

 

I would say the big turning point came from the independent wrestling scene. Even foreign promotions. As WWE’s product went stale, wrestling fans turned to these other promotions for amazing matches and more adult storylines. A few big names in Japan were turning heads such as Cody Rhodes, Hangman Adam Page, The Young Bucks, Kenny Omega, and Chris Jericho. 

 

 

Then the son of a Billionaire, Tony Khan, a major wrestling fan, saw an opportunity. Growing up as a wrestling fan, he saw that my generation of wrestling fans didn’t have a product to excite them in North America. Enter All Elite Wrestling (AEW).

 

I have to be honest, lately I have just been watching AEW. I watch the occasional WWE pay per view here and there, but AEW has kept me glued in front of my television. I don’t want to be the guy that says one brand sucks and the other is better. I just think it is a great time to be a wrestling fan.

 

Competition is great. We now have a ratings war, and we’ll see what writing team pulls off captivating story lines. Not only that, but we will be seeing talent jump ship and/or renew larger contracts. Reminiscent of the old WWF vs WCW days. 

 

Recently, AEW has brought back CM Punk. This made sports headline news and sort of broke the internet. He hasn’t been in a wrestling match for 7 years, and he was one of their major marquee names on last night’s AEW All Out pay per view.

 

WWE had to counter back by bringing back Brock Lesnar. Recently they also brought back John Cena for the Summer of Cena. But now he has left for Hollywood. I listened to one of Cena’s recent interviews, and he said WWE just can’t make those superstars like The Rock, Undertaker, Triple H and himself. Someone who can come and raise ratings and ticket sales just as John Cena did. Sure, The Rock is likely to come back for another Wrestlemania match in the next few years vs Roman Reigns, but for the long term, there really is only Brock Lesnar and Goldberg. This could be a worry given the product right now.

 

I just finished watching AEW All Out. Two big names signed which is a game changer. Adam Cole (Bay Bay) and Bryan Danielson debuted and are All Elite. This is huge as both superstars were given large contracts, and Adam Cole was promised a move from NXT to either Raw or Smackdown. Both stars chose AEW instead. Paradigm shift.

 

WWE has been getting some flak from wrestling fans the past year. We know they make big money. A barrage of firings during the pandemic didn’t go over well with fans, especially since it came after WWE reported record profits. A year after, more superstars were let go. This has led to speculation that WWE is gearing for a sale.

 

Vince McMahon maybe wants to cash out and make bank. Maybe focus on the XFL? This would explain WWE letting go of talent including backstage and crew, as well as making their product more appealing to a younger audience. Cutting costs and making the numbers, hence the valuation, larger. 

 

The buyers? Disney. Yes. That’s right. But you can see it. Disney having all the WWE’s streaming services on Disney plus, a theme park section dedicated to it, maybe even super hero gimmicks (well, that’s already happening in WWE). 

Many people know Disney owns Star Wars and Marvel, but take a look at this image below to see how many companies Disney actually owns. Wow.

 

https://www.titlemax.com/discovery-center/money-finance/companies-disney-owns-worldwide/

 

Perhaps WWE will be on the list. Currently the market cap of WWE is just shy of $4 Billion ($3.96 Billion According to MarketWatch). If WWE is gearing up for a sale, then we would expect the buyout to be higher.

 

This leads to an enticing opportunity for a longer term hold. Firstly, I must say WWE does pay a dividend. $0.12 cents or a yield of 092%. I’m not saying this makes it a mainstay in a value portfolio, but it is something to consider given the technical set up I am about to present.

 

 

The chart actually looks great for a rebound. We hit highs of $70 a few months ago, but we found support at a major flip zone. The $46 zone is a major technical inflection point going forward. Buyers stepped in and kept price above. We ranged until breaking out two weeks ago. Going forward, we remain bullish as long as price remains above the $50.85 zone. We could see a retest before making more recent highs as typical of breakout patterns. If this occurs, watch to see if buyers step in. We got a hint of that with Friday’s candle showing a wick during a dump, indicating buying pressure.

 

In terms of resistance as a trade, the $58 zone is the next major zone. You could consider taking profits there, or targeting that area for longer dated option calls. This is just RUMORS, but there has been chatter that if WWE is to be sold, it would happen around December of this year or early next year. Let’s not forget the numbers will start to look good. WWE is back touring and having shows in stadiums and arenas. We are talking the return of ticket sales and merchandise sales which will have an impact on future earnings.

 

But technically, we have some positive confluences here. I would be worried if we close back below $50.70. It would mean the buying pressure hasn’t sustained momentum, and we are likely not making higher lows in a new uptrend. If we sustain momentum, we have a move upwards regardless if the rumor of a Disney buy out comes out to be true or not in the future.