Will a Strong XFL Debut Justify WWE's Huge Investment?

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The XFL, a subsidiary of the WWE  (WWE) - Get Report, made its debut on February 8 after a nearly 20-year hiatus. The league is attempting to capture viewers who are yearning for football during the National Football League’s six-month offseason.

The WWE announced on January 30 that it was parting ways with co-presidents Michelle Wilson and George Barrios, the company two most senior executives. It was also announced that the two executives would be vacating their seats on the company’s board of directors.

With the debut of their “alternative to the NFL”, WWE and the XFL are hoping to see a boost in their share prices.

WWE stock was up 0.21% at $42.62 on Monday following a drop of nearly 4% premarket after Wells Fargo analyst Steven Cahall downgraded the stock to underweight from overweight and cut his one-year price target to $36 from $80.

Demand for tickets to XFL games on the league’s opening weekend surpassed expectations, with the price to attend the D.C. Defenders home game reaching $130 on the secondary market, according to JohnWallStreet, a Sports Illustrated channel.

The XFL managed to outsell the Alliance of American Football (now defunct) before the season began. Sales of Houston Roughnecks tickets were so strong that the club decided to open up two additional sections in their home stadium. The franchises in  New York and Dallas posted official attendance figures north of 17,000.

WWE stock was down upwards of one percent heading into the close Monday following a drop of nearly 4 percent premarket after Wells Fargo analyst Steven Cahall downgraded the stock to underweight from overweight and cut his one-year price target to $36 from $80.

The WWE has made a half-billion dollar investment in the XFL, and it is hoping renewed interest in an alternative to the NFL will help the company rebound after a difficult two weeks. 

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