World Wrestling Entertainment, Inc. (NYSE:WWE) CEO Vince McMahon has sold roughly 3.3 million shares, worth about $100 million, to fund a new entity named Alpha Entertainment LLC, according to a recent Securities and Exchange Commission (SEC) filing. The filing also said Alpha Entertainment plans to "explore investments opportunities... including professional football." As such, WWE stock as shed 8.6% to trade at $29.13.
Analysts are also weighing in. Citigroup downgraded the shares to "neutral" from "buy," but raised its price target to $33 from $29. The brokerage firm does not see much more upside in 2018 following such a strong year for WWE stock. It also added, "... we suspect the Street assumes that Mr. McMahon will sell WWE to fund an XFL investment," referring to the football league McMahon started in 2001 and ended after just one season.
Most analysts already had a skeptical outlook on the security. More than half of covering brokerage firms had just "hold" ratings, and the average 12-month price target sits down at $28.30.
Elsewhere, short interest had been declining on World Wrestling Entertainment in recent months, but over 13% of the stock's float is still sold short. Going by average daily volumes, these bears control almost two weeks' worth of buying power.
Still, WWE stock remains up 60% in 2017, and touched an 18-year high of $33.28 on Dec. 19. Today's pullback puts the shares on pace for their first close below the 20-day moving average since Oct. 25, though they're still sitting about 2 points above the rising 50-day trendline.