News UFC sued again in second antitrust lawsuit, WME stock falling ever since

TheHeMan said:
The stock ticker is EDR for Endeavor. Their stock has been holding steady over the week or 2. Companies get sued all the time, it doesn't necessarily cause their stock price to go down.
Click to expand...
Depends on the type of lawsuit, if the antitrust is actually successful, UFC is going to be majorly screwed. They will have to change their entire business model and how they contract with fighters. They will lose exclusive agreement with champions. UFC is endeavors biggest asset, they would get crushed if this lawsuit is successful.
 
Dana-White-Money.jpg
 
I’m no Sal the Stockbroker, but their stock seems to be doing fine. It took the same Covid hit that most in the entertainment industry probably did and actually seems to hold pretty steady otherwise, excluding the little dip and bounce back after Conor lost but that could be unrelated. I don’t keep up on the entertainment news that much.

7EAEA48E-A16D-43E5-9349-242D5E1E90D5.jpeg
 
That lawsuit was filed on the 6/23 and the week following that date the stock was actually up!
 
TheHeMan said:
The stock ticker is EDR for Endeavor. Their stock has been holding steady over the week or 2. Companies get sued all the time, it doesn't necessarily cause their stock price to go down.
Click to expand...

This, OP is full of caca
 
If you think it would be a good stock to short, then you would already have shorted it - you wouldn't be waiting. So tell us, have you shorted it?
 
baba2008 said:
If you think it would be a good stock to short, then you would already have shorted it - you wouldn't be waiting. So tell us, have you shorted it?
Click to expand...

Nope, because I said it "might be a good stock to short", not that it is currently a good one to short. Shorting requires a ton of risk, I don't like to short a company, unless it's really likely to be overvalued, even then you can get burned bad.

The company is already probably overvalued, I think the best time to short this stock is if there's likely to be a summary judgment for the Plaintiff, or if it's about to go to trial.

UFC already lost on it's motion to dismiss, so unless they think they can prevail on a summary judgment motion after discovery. This is going to be a nightmare moving forward for them. Even if they somehow win a jury trial, the negative PR has some short-term potential for profit betting on it falling.
 
TheHeMan said:
The stock ticker is EDR for Endeavor. Their stock has been holding steady over the week or 2. Companies get sued all the time, it doesn't necessarily cause their stock price to go down.
Click to expand...

Other thing to consider on antitrust violations is that it can also lead to the federal government bringing antitrust suit. The current lawsuit is brought by a private party but if it's successful, I'd be curious if the DOJ can bring one under the Sherman act as well or if they'd be interested in doing so.

It's been many years if not at least a decade since I looked at the Sherman act but I think the potential is there. I wonder how much the business would shift if UFC couldn't do exclusive contract with champions. I'd also be curious how many other fighters would sue the UFC that's not currently part of the class action (granted, I don't know how the statute of limitations work in class actions, and whether they had to join at the beginning).
 
I'm buying Seven Eleven stock after what happened yesterday
 
JJCc said:
Not advice, just saying to watch the stock. The judge already ordered that a lot of the internal documents obtain from discovery in the lawsuit will be released.

It’s bound to affect the stock price when it comes out. Will be interesting how it develops for the company.
Click to expand...


Endeavor (EDR) has been slowly, consistently dropping since its IPO. It closed at a 4% loss on day two. Its currently down 12% since its IPO. I don't think its fair or accurate to say this news of a second suit, which serves the sole purpose of extending the class date forward beyond 2017, is what has moved the price. It flopped right out of the gate.

Of note, they did beat EPS for 2020 Q4 and Q1 of 2021. Next report is out August 15th.

Frankly the UFC has been a piggy bank for Endeavor and it floated the company through the pandemic. They've been holding it upside down shaking money out. A lot of the right people got their payday at IPO.

My bet is current stakeholders - who already have fortunes in the hundreds of millions - will have their money out of EDR before this class action is resolved. I think a settlement at this point is out of the question and this goes to trial. This will take years.

I think EDR is a bad buy because of their over leveraging of debt. Its a high risk low reward play.
 
Last edited:
rjmbrd said:
Endeavor (EDR) has been slowly, consistently dropping since its IPO. It closed at a 4% loss on day two. Its currently down 12% since its IPO. I don't think its fair or accurate to say this news of a second suit, which serves the sole purpose of extended the class by moving the date forward beyond 2017, is what has moved the price. It flopped right out of the gate.

Of note, they did beat EPS for 2020 Q4 and Q1 of 2021. Next report is out August 15th.

Frankly the UFC has been a piggy bank for Endeavor and it floated the company through the pandemic. They've been holding it upside down shaking money out. A lot of the right people got their payday at IPO.

My bet is current stakeholders - who already have fortunes in the hundreds of millions - will have their money out of EDR before this class action is resolved. I think a settlement at this point is out of the question and this goes to trial. This will take years.

I think EDR is a bad buy because of their over leveraging of debt. Its a high risk low reward play.
Click to expand...

I just took a look at the timeline of the case, I didn't even realize the original case already had UFC move for a motion for summary judgment and it got denied.

Discovery must be pretty much over then, I presume we will see this case go to trial really soon. I'm interested in the unmasking order the judge gave out. We'll get to see a lot of juicy internal documents regarding fighter pay.

Edit: I do think you are correct, that the drop in stock price isn't due to the second lawsuit. The second lawsuit actually is pretty identical to the first, it just covers the time period that first lawsuit failed to cover since it's filing (this will take into account damages from the original first lawsuit, leading into this one).

I do think though that EDR is overvalued, and the resolution of this antitrust suit is only going to hurt this company a lot more. I think it's safe to bet that UFC will have to redo how they do business and it's going to be a lot less profitable for them in the future.
 
JJCc said:
https://static1.squarespace.com/static/60663d496017a751ed8ca929/t/60df2c273adee60e31b3fe0e/1625238569003/Antitrust+Class+Action+Complaint+(Johnson+and+Dollaway+v.+Zuffa).pdf

The second lawsuit filed against UFC, the Johnson complaint

Stock has been dropping since the second complaint was filed.

Keep watch guys, if the antitrust lawsuit takes root and starts revealing internal discovery documents, might be a good short.

I got WME as a potential stock to short if there’s anymore negative developments coming. Might be some easy and quick money.
Click to expand...

Buy $24 December Puts?
 
TheGrouch said:
Buy $24 December Puts?
Click to expand...

I'm not taking any sort of position on EDR yet, I'm waiting to see what kind of documents come out of the unseal order by the judge.

Zuffa's motion for summary judgment was denied, which means the judge probably thinks there's enough documents that turn up in discovery to give Plaintiff's a chance at a successful verdict for Plaintiff.

I think people underestimate how bad this can go for EDR if this case even goes to trial, let alone the fact they could lose at trial. Anyways, I'm really interested in seeing what kind of documents come out that supports UFC is violating antitrust laws.
 
JJCc said:
I just took a look at the timeline of the case, I didn't even realize the original case already had UFC move for a motion for summary judgment and it got denied.

Discovery must be pretty much over then, I presume we will see this case go to trial really soon. I'm interested in the unmasking order the judge gave out. We'll get to see a lot of juicy internal documents regarding fighter pay.

Edit: I do think you are correct, that the drop in stock price isn't due to the second lawsuit. The second lawsuit actually is pretty identical to the first, it just covers the time period that first lawsuit failed to cover since it's filing (this will take into account damages from the original first lawsuit, leading into this one).

I do think though that EDR is overvalued, and the resolution of this antitrust suit is only going to hurt this company a lot more. I think it's safe to bet that UFC will have to redo how they do business and it's going to be a lot less profitable for them in the future.
Click to expand...


This case has a lot of eyeballs and will have a potentially massive impact on many industries. It will reach far beyond MMA. The judge is going to formally certify the class and has announced such. This is going to trial and it would be a shocking turn of events if it did not.

Assume we are several years out from this being concluded. If it appears an unfavorable decision is coming down, current stake holders in EDR will cash out accordingly. Many of the current UFC decisions appear to be short term money plays, and they are. There is a very real chance substantial change will be coming to the UFC a few years from now.

EDR is a pass for me because its debt load and how many things need to go right for them to be meaningfully profitable. It's a lot of risk for an unimpressive upside.
 
You must log in or register to reply here.

Latest posts

Forum statistics

Threads
1,236,680
Messages
55,434,144
Members
174,775
Latest member
kilgorevontrouty

Share this page

Back
Top