Endeavor stock rallied in its trading debut on Thursday, after the entertainment and sports events company raised $511.2 million in its initial public offering.
The debut for Endeavor Group (EDR), which is run by Hollywood mogul Ari Emanuel, comes after the company filed to go public in 2019 but withdrew the IPO shortly before it was set to start trading. The company, at the time, cited weak market demand.
Endeavor — the owner of the UFC fighting league and the talent agency WME — on Wednesday said it priced its IPO at $24. That price was at the high end of its expected range.
Endeavor stock rose 4% to 24.97 in the stock market today.
On Wednesday, the company said it was offering 21.3 million shares of its common stock. It will also offer up to 3.2 million extra shares of Endeavor stock that the underwriters have a 30-day option to buy. The offering is expected to close on May 3.
Morgan Stanley, Goldman Sachs, JPMorgan and Deutsche Bank Securities served as lead bookrunners.
Endeavor, in its IPO paperwork, also said it was raising nearly $1.8 billion in a private placement. KKR and Silver Lake are among the investors.
The company has also said that it plans to buy up the remaining shares of UFC that it doesn’t already own. It owned 50.1% of UFC’s common equity prior to that agreement.
Endeavor Stock, Entertainment Landscape
Endeavor has a staff of around 6,400 and operates in 28 nations. The debut for Endeavor stock comes after the coronavirus pandemic temporarily shut down large parts of the entertainment industry and major sporting events, leaving many in the arts to take events online.
However, anticipation for a wave of celebratory spending has grown in the U.S. as vaccinations expand and the economy reopens. While millions lost jobs due to the pandemic, others, still working from home with nothing to do, saved money.
Emanuel, in the IPO filing, said the UFC was among the first sports organizations to “responsibly” get back to work last spring. It later hosted the WNBA’s season and in the fall helped usher the return of New York Fashion Week.
He also said the company “delivered virtual solutions to our more consumer-dependent live events and experiences — from speaking and book tours to art fairs to sports training — while Endeavor Content relied on our global network and local expertise to relocate and restart productions.”
Endeavor’s revenue slid 24% last year to around $3.5 billion. The company posted a net loss of $625.3 million.
Endeavor also noted that pandemic-related restrictions remain in place for some of its businesses, like live events where attendance might remain subdued and that might require extra safety costs. And it said it expected any recovery from the pandemic will be “gradual.”
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