by: Wayne Duggan, Benzinga Staff Writer
World Wrestling Entertainment, Inc. WWE 7.94% stock tumbled 8.6 percent Friday morning after a new filing from the company revealed CEO Vince McMahon has sold more than $100 million of his WWE shares to raise cash to fund a professional sports venture.
McMahon sold 3.34 million shares of stock “primarily to fund a separate entity from the Company, Alpha Entertainment LLC, which Mr. McMahon established to explore investment opportunities across the sports and entertainment landscapes, including professional football.”
This Is… Not The First Time
This isn't the first time McMahon has dipped his toes into the professional football market. Back in 2001, McMahon launched the XFL professional football league, a venture which is widely considered his biggest business flop. WWE and partner NBC reportedly lost $35 million each on the XFL, which lasted just one season.
The filing made clear that Alpha Entertainment won't not be a part of WWE, but shareholders seem concerned that McMahon’s new venture could negatively impact WWE’s business.
Last week, Alpha filed for five trademarks related to the XFL and applied to trademark “URFL.”
WWE Stock's Run
WWE stock made new all-time highs earlier this month before Friday's sell-off.
McMahon’s sale represents about 4.3 percent of WWE’s total outstanding shares, and the CEO has said he doesn't currently plan to sell additional shares.
Following news of the sale, Citigroup downgraded WWE stock from Buy to Neutral, but raised its price target from $29 to $33. Analyst Jason Bazinet said WWE stock is currently fully valued following its 62.5 percent year-to-date gain.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.