UFC owners at Endeavor raise $511 million during IPO as stock prices jump 5 percent on first day

Endeavor, the UFC’s parent company, raised $511 million during its initial public offering (IPO) on Thursday with its stock up five percent from the opening price.

When the stock market closed on Thursday, Endeavor Group Holdings (EDR on the New York Stock Exchange) was trading at $25.20 per share, up from $24 at the market’s open.

According to Market Watch, “the company EDR, +5.00% sold 21.3 million shares, priced at $24 each, the top of its proposed price range of $23 to $24, raising about $511 million at a valuation of more than $10 billion.”

All told, the planned IPO has to be seen as a huge success for Endeavor CEO Ari Emanuel and the other partners in the company after plans for a similar launch were scrapped in 2019.

At one point during trading on Thursday, Endeavor’s stock shot up to 12 percent over the opening prices, dipping below the $24 mark for a very brief period of time before rebounding.

Analysts had warned that Endeavor was a risky bet for investors thanks to the volatile nature of its many businesses, which includes a powerhouse talent agency as well as a live events business and sports properties such as the UFC and Professional Bull Riders.

The past year was a serious test for Endeavor after the global pandemic shut down many of the industries where the company operates, most notably with film and television productions on hold due to restrictions placed by local governments. Eventually, Endeavor rebounded largely thanks to the UFC continuing to promote cards during the pandemic with UFC Fight Pass subscriptions up 40 percent for the year as well as reporting the highest pay-per-view sales in company history during 2020.

Back in 2016, Endeavor along with a group of investors paid just over $4 billion to acquire the UFC and prior to the IPO on Thursday, the company had raised additional funds to retain complete control over the MMA promotion. That allowed Endeavor to present the UFC as huge asset to investors looking to put down money during the IPO.

“We have a huge opportunity in the market place because I think we’re one of one,” Emanuel told Bloomberg on Thursday when speaking about the UFC. “The sport is an incredible sport, it’s a global sport unlike anything else. I don’t have to tell you the rules, whether you’re in Singapore, Japan, China, United States, France, Latin America, the Middle East, you know the rules.

“I think it’s different if you had cricket going on around the world or U.S. football going around the world. You can also consume it on a highlight because it’s a 15 or 25 minute fight, a lot of fights end quickly. You can consume it on your phone and you don’t really have to explain the rules and we have fighters from all over the world. We think it’s only true global sport that everybody understands.”

Emanuel, who served as the inspiration for the character Ari Gold on the HBO series “Entourage,” added that the UFC has become a springboard of ideas that Endeavor has used for numerous other businesses, including helping their clients in the entertainment industry like plans for the upcoming launch of NFTs in June. By seeing the success that the UFC has found in different areas from social media to digital content, Endeavor can then use those lessons to help other areas of their business.

In addition to leveraging the UFC as Endeavor went public on Thursday, the company also added some extra name value with Tesla CEO Elon Musk joining the board of directors this year.

Of course, the launch of Endeavor as a publicly traded company doesn’t mean that control will be slipping away from Emanuel or the other leaders in the company. Thanks to the numerous classes of stock offered, voting control will remain with the company with Emanuel retaining 17 percent voting rights, while Silver Lake, an investment company deeply involved with Endeavor, will maintain around 68 percent of the voting power.