Shares of WWE (WWE) are under pressure on Wednesday after Loop Capital analyst Alan Gould downgraded the stock to Sell from Hold, saying that a "transformative deal" for the company is not coming. Additionally, a 2.26M share block trade of WWE shares being sold by the company's founder, Vince McMahon, was priced at $38 per share.

SELL WWE: In a research note to investors, Loop Capital analyst Alan Gould downgraded WWE to Sell from Hold and lowered his price target on the shares to $30 from $43 as he believes a "transformative deal" for the company is not coming. The analyst also cited the company's "disappointing guidance" on its last two earnings calls, the loss of its co-presidents, and now CEO Vince McMahon entering a prepaid forward contract on 3.5M shares.

While the company is financially strong, and Gould is confident the business will bounce back, it will likely rebound to a lower 2021 level. Wrestlemania will not be the same spectacle it typically is out of the Orlando Performance Center as opposed to Tampa Stadium in front of 70,000-plus live fans, he added, arguing that it will generate less revenue and likely less ongoing WWE Network subscribers. The analyst also pointed out that ratings have been slipping on Raw and NXT and that he is concerned of the possibility that WWE will not be able to continue to provide live weekly TV shows if its stars are getting sick or if the government requires social distancing amid the COVID-19 ongoing pandemic.

STOCK SALE: WWE's CEO Vince McMahon is selling part of his stake in the company through Morgan Stanley at $38 per share, with Loop Capital’s Gould saying it amounts to about 15% of his holdings. The overnight deal priced 2.26M shares at the midpoint of a $37.75-$38.25 range.

PRICE ACTION: In afternoon trading, shares of WWE have dropped over 6% to $36.58.