A $100 million investment in the Professional Fighters League has put the smackdown on Endeavor Group Holdings’ stock.

The stock market is incredibly irrational.

In the two says since it was reported that SRJ Sports Investments, a company launched earlier this month by Saudi Arabia’s Public Investment Fund, acquired a minority stake in mixed martial arts promotion Professional Fighters League for some $100 million, World Wrestling Entertainment’s (WWE) market capitalization has plummeted to $8 billion from $9.6 billion, while Endeavor Group Holdings (owner of UFC and WWE) market cap dropped to $6.6 billion from $7.4 billion.

In other words, Wall Street has bet that a $100 million of capital in the PFL equates a $2.4 billion evisceration in its rivals. I get the fear of piles of Saudi money fueling global growth for the PFL. Investors are nervous, of course, because WWE and UFC are set to complete their merger as a public company next month. Still, the size of loss in market cap for WWE and Endeavor borders on the absurd because it fails to account for the brand power of the two entities and the business acumen of their management.

UFC is by far the biggest MMA promotion in the world and is a among the most valuable global sports brands. Perhaps more important, it is led by Dana White, among the top sports entrepreneurs of this century.

WWE, meanwhile, despite the popularity and success of its recent challenger All Elite Wrestling, is still, by far, more popular on television. And its venerable Wrestlemania franchise—essentially the Super Bowl of professional wrestling—set records for viewership, gate, sponsorship, merchandise and social media. in April. And of course, its CEO, Vince McMahon, has been a visionary.

Take a breath, folks, even if the $100 million investment in the PFL becomes $200 million or $300 million, it still doesn’t come close to equaling $2.4 billion.


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