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The bear market has erased more than two years of gains in sports stocks, with the JohnWallStreet Sports Stock Index falling 14% in September despite sports betting companies seeing good trends with the start of the NFL season. .

The Sportico barometer of widely held sports stocks closed the third quarter at 1,014, more than 42% below its all-time high. The index is now at its lowest point since August 3, 2020; I remember better as the day The Rock bought the XFL. The JohnWallStreet Sports Stock Index was reconstituted as a measure of 40 equally weighted stocks out of 1,000 in early August of that year, peaking at 1,763 on November 1, 2021. The sell-off in growth stocks, which includes the most sports-related stocks, has since been almost unforgiving, with the Sportico index falling eight of the last 11 months.

Much of the blame lies with the broad market. The S&P 500 has been in a bear market for most of 2022 and is down nearly 25% year to date.

“It’s been a very painful quarter for the stock market,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York, he told Reuters. “There is uncertainty about the Federal Reserve and its ability to keep the economy moving while they tackle inflation and bring it down to a sustainable level.”

Those broad concerns knocked nearly every stock in the sports index lower in September. FaZe Holdings (FAZE), the parent of the esports FaZe Clan, was the worst performer, losing 47% of its share price. The business was valued at $1 billion in a SPAC merger that made it public this summer; it now has a market capitalization of $706 million. The weakness comes out of no apparent news, but rather out of a lack of market support that has been typical of companies that have gone public through a blank check merger this year.

Many other companies suffered heavy losses in September, with 28 of the 40 in the sports index losing 10% of their value or more. Daktronics (DAKT), which makes scoreboards used in 60% of all professional sports venues in North America, lost 34% for the month, despite reporting a quarterly sales increase of 19% and a build record orders, including an acre-sized display for L.A.’s Intuit Dome Clippers now under construction. Shares of Nike (NKE) sank on Friday, falling almost 13%, a loss of nearly $20 billion in value, after reporting third-quarter earnings that more or less matched expectations but belied the fact that that the company resorted to discounting its products to move inventory. “Sell more, earn less? Just don’t,” wrote Simeon Siegel, an analyst at BMO Capital Markets.

Betting stocks, which perked up in August and appeared to enjoy a strong start to the NFL betting season, were all lower for the month. GeoComply, which services the sports betting industry, said there were 103 million transactions in the league’s opening weekend, well up from 60.1 million in 2021. That should have buoyed Wall Street, it reflects strong business in recently opened betting states, and in relative terms, most betting stocks did not fall as much as the broader market.

Still, there were a few that experienced big sell-offs in September, including Caesars Entertainment, down 25% and hit in part by concerns about Asian casino volumes, and Rush Street Interactive, down 24% due to that its margins were reduced by the New York market. high tax rates on sports betting.

Only four stocks posted gains for the month, with only World Wrestling Entertainment (WWE, up 5%) rising more than a nominal amount. WWE continues to gain momentum from media deals and exceeding profit expectations. Over the past year, WWE has been the best performing sports action, up 26%.

Sportico’s JohnWallStreet Sports Stock Index is intended to reflect the state of the sports business. To be included in the index, companies must have a minimum market capitalization of $50 million and be listed in sufficient volume on a US stock exchange. The index is rebalanced quarterly, with constituents removed and added as needed and the weights of each stock return to 2.5% of the index.

With the start of the fourth quarter, SPAC RedBall was removed from the index because it went out of business and returned its capital to shareholders after failing to execute a merger during its two-year shelf life. Taking his place is the Kevin Durant-led SPAC, Infinite Acquisition (NFNT). Infinite made its initial public offering in November of last year, at the height of growth stocks, raising $240 million to pursue a sports tech or other consumer tech business. While SPACs have been among the most underdogs in the stock market of late, there remain 64 sports-related SPACs actively seeking a company to go public. As a group, they have $18.4 billion in capital raised from their IPOs, according to data compiled by Sportico.

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