TKO: "A Transformative Deal"

In January 2024, Netflix announced a 10-year, ~$5.2 billion deal for “Raw”, the WWE’s flagship weekly program. I had previously discussed in the TKO initiation (published June 2023) why I believed this was likely, along with the broader implications if it happened (TKO owns the WWE and the UFC).

In March 2024, I updated on TKO in “A Transformative Deal”. I removed the paywall this morning (link) so you can see my thought process and decision-making at that time. My objective is to give you a clear view of how I think about potential investment ideas, along with how those views are updated and communicated to TSOH paid subscribers. In addition, I want to highlight the transparency and full disclosure of all changes (before they are executed) that you will receive as a TSOH Investment Research subscriber.

As you’ll see, I laid out my views on the importance of the Netflix deal for TKO, along with its impact on my long-term financial projections (critically, accounting for the indirect impact from site fees and other revenue sources that would develop / accelerate further alongside success with Netflix).

In addition, you’ll see in the conclusion that I decided it was time to buy TKO, with the specifics of that trade detailed in “Portfolio Change - 03/12/2024”. (Any time I make a portfolio change, I send a post at 5pm ET the day before the trades where I specify the proposed changes and explain my rationale).

On March 12th, TKO was added to the TSOH portfolio at a 6% weighing, with an average purchase price of ~$80 per share. The stock has had a strong run subsequently, closing on Friday at ~$125 per share (+55% since 03/12/2024).

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NOTE - This is not investment advice. Do your own due diligence.

I make no representation, warranty, or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information presented in this report. Assumptions, opinions, and estimates expressed in this report constitute my judgment as of the date thereof and are subject to change without notice. Projections are based on a number of assumptions, and there is no guarantee that they will be achieved. TSOH Investment Research is not acting as your advisor or in any fiduciary capacity.