Endeavor’s IPO faces weak opening according to report

September 26, 2019

The New York Post reports that Endeavor’s IPO is facing a weak opening.  The company goes public on Friday.

Earlier this week, the company anticipate to price the IPO at $30-$32 per share as it will open on the New York Stock Exchange under the EDR ticker symbol.  However, the New York Post reports that the price range could fall “as low as $25 to $26 per share.”  Although a remote option, the Post notes that a source indicated that it may pull the IPO but that option is less likely.

The belief, according to the Post article, is that investors were not impressed with the “road show.”  The company has positioned itself as a “growth company that can seize on the volatility of the media industry.”  However, “there are some concerns about the company’s portfolio.” One of which is the UFC.  The article notes that the UFC, “Endeavor’s biggest earnings driver, is facing an influx of competition…”

Notably, on Wednesday, Peloton the fitness startup that sells its own subscription-based exercise equipment priced at $29 per share which was at the high-end of the expected range.

Payout Perspective:

Its hard to tell whether the article is based on speculation or if there is truth to the concern that the IPO is in jeopardy.  WeWork has delayed its IPO indefinitely as its valuation has collapsed due to issues with its infrastructure and the ousting of its founder and CEO.  But, Endeavor will not experience such a collapse.  But its initial offering could fail to meet expectations based upon the article.  The UFC facing an “influx of competition” seems far-fetched even if they believe the finances of One Championship.  Certainly, Bellator is an established organization in the U.S. but falls far from usurping the chokehold the UFC has on the MMA industry.  The article could be a way as to temper expectations if Friday’s opening fails to yield the support it desires.  What will be interesting is seeing how this will determine how the UFC’s expectation of its own IPO evolves in the not-too-distant future.

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