World Wrestling Entertainment, Inc WWE shares are gaining in the after-hours session on the news report that the company could be exploring a potential sale.
The Wall Street Journal reported that former chief Vince McMahon, who retired after allegations of sexual misconduct, plans to return to the company.
In July 2022, McMahon, the renowned promoter, who helped establish the careers of top stars such as Dwayne "The Rock" Johnson and John Cena, confirmed that he would officially hand leadership over to co-CEOs, his daughter, Stephanie McMahon (who was named interim CEO in June after the internal investigation of her father was originally announced) and another board member, Nick Khan.
WWE, in a regulatory filing submitted to the SEC, had disclosed $14.6 million in "Unrecorded Expenses" that could be related to the hush money payouts former CEO Vince McMahon allegedly made.
In a letter to the WWE, McMahon wrote about his desire to return to the company he ran for more than 40 years and lead a strategic review process.
McMahon thinks there is a small window to start a sales process since WWE's media rights, including those of "Raw" and "SmackDown," are about to be renegotiated, the WSJ reported.
WWE's market cap is more than $5 billion, and McMahon thinks the company would be an attractive takeover target as the media and content space is evolving rapidly.
The board welcomed the idea of working with McMahon on a review process but rejected the idea of his return, calling the move against the interest of the shareholders.
WWE generated $202.6 million in operating cash flow for the nine months ended September 2022. It generated a free cash flow of $82.7 million, down from $111.9 million in the same period for 2021.
It held $181.7 million in cash and $259.3 million in short-term investments in 3Q 2022.
Price Action: WWE shares are up 11% at $80.05 in the after-hours session on the last check Thursday.
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