Please ensure Javascript is enabled for purposes of website accessibility

Why Wanda Sports Group Stock Soared Today

By Jeremy Bowman - Updated Feb 18, 2020 at 2:29PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the Ironman parent jumped on news of a potential sale.

What happened

Shares of Wanda Sports Group (WSG) were surging today on a report from Bloomberg that the sports event operator was considering selling the Ironman brand. 

As a result, the stock was up 43.1% as of 1:37 p.m. EST Tuesday.

The feet of runners in a road race

Image source: Getty Images.

So what

Wanda is a Chinese company that owns and runs events including the Rock 'n' Roll Marathon and holds media rights for events like the FIFA World Cup. It acquired Ironman, known for its ultra triathalons, in 2015, but is now exploring a sale. The company has hired an adviser and has met with private equity firms to discuss a sale. 

Wanda is aiming to sell the Ironman business for $1 billion, more than the company's market cap of around $400 million prior to today's jump. It also has $927 million in debt, giving it an enterprise value of more than $1.3 billion before today's news broke.

The company was approached last year by the Professional Triathletes Organisation (PTO) about a potential sale, arguing that excessive debt was preventing Wanda from investing in the Ironman. The PTO renewed its offer on Feb. 4, proposing an all-cash deal, according to Bloomberg.

Considering Wanda's debt burden, proceeds from a sale will likely be used to pay down debt.

Now what

The report noted that Wanda may still choose not to sell the Ironman business, but it's clear that investors like the idea. The stock was trading down by about 62% from its IPO last July before today's jump, but considering the growth of such events as well as the popularity of sports media, Wanda could be positioned for a comeback if the deal goes through. 


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wanda Sports Group Company Limited Stock Quote
Wanda Sports Group Company Limited

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.