World Wrestling Entertainment, Inc. (WWE) shares have rebounded from a midweek dip after the company announced a surprising round of talent layoffs. The cost-cutting measures have led some investors to speculate that WWE could be preparing for a potential buyout.

What Happened? This week, WWE executed its latest round of talent layoffs, which included big-name performers Braun Stroman, Alister Black and Lana.

The layoffs have social media buzzing about the potential that WWE could be preparing for a buyout by Walt Disney Co (DIS) or another media entity. Stroman’s contract, in particular, was reportedly very large, suggesting WWE may be attempting to clean up its accounting in preparation for a deal.

Why It’s Important: In January, WWE announced its WWE Network would be available exclusively via Comcast Corporation (CMCSA) streaming service Peacock. The Peacock deal was reportedly valued at more than $1 billion over five years.

WWE has also been struggling with declining ratings for its shows. On May 24, WWE’s flagship show “Raw” reported its second lowest rating in history among viewers in the 18-49 age demographic.

CEO Vince McMahon is now 75 years old and could be looking to cash out of his $4.3 billion company. McMahon currently owns about 38% of WWE’s shares and controls 81% of the company’s voting power.

The growing role of Nick Khan within the company has also raised eyebrows among WWE followers. Khan joined the company as President & Chief Revenue Officer in August 2020, and several rounds of talent layoffs have followed. On June 1, Khan was elected to WWE’s board of directors.

Finally, the media landscape has been booming with blockbuster M&A deals in recent years. Media organizations appear to be starved for content, potentially making WWE a hot target. In May, AT&T Inc. (T) announced a $43 billion deal to sell its TimeWarner assets to Discovery Communications Inc. (DISCA).

Downplaying The Rumors: Despite all the social media rumors, Wrestlenomics author Brandon Thurston downplayed a potential WWE sale on Thursday.

“I talked with 5 people in the WWE investor community in the last 24 hours about the notion that the company's recent actions indicate they're preparing for a sale. Not one of them thought so. Even the stock price is no-selling wrestling Twitter,” Thurston tweeted.

Benzinga’s Take: While a buyout of WWE is certainly within the realm of possibility, an imminent deal appears to be nothing more than social media rumors and online speculation at this point. In fact, for long-time followers of WWE, it can be difficult to imagine McMahon turning over control of his company at any time in the near future.

WWE CEO Vince McMahon and Paul "Triple H" Levesque speak to Army Command Sgt. Maj. John W. Troxell, Senior Enlisted Advisor to the Chairman of the Joint Chiefs of Staff, before the 14th Annual Tribute to the Troops Event at the Verizon Center in Washington, D.C., Dec. 13, 2016. DoD Photo by Navy Petty Officer 2nd Class Dominique A. Pineiro