Mixed martial arts is on Wall Street's radar. Not surprising considering the sport's first public company has been making waves in downtown New York City.
John Dorman, an analyst for leading online financial service data provider, Bloomberg.com, recently took an in-depth look at the International Fight League (IFL), and the company's stock price (Nasdaq symbol IFLI) that has risen an astonishing 64 percent this year - a pretty amazing feat considering the company's book value (assets minus liabilities) as of September 30th was -$960K and its total assets amounted to a mere $10K.
"According to the "Forbes Franchise Values'' posted on the ESPN Sports Business Web site, the New York Yankees are worth about $730 million and the Dallas Cowboys $923 million. To put International Fight League in the same ballpark seems ludicrous to me," notes Dorman in an effort to put things in perspective.
The reason for the astonishingly disproportionate increase in the stock's price relative to its actual value? Dorfman credits "speculation" and "Internet chatter" (i.e. mixed martial arts' many message boards, the communities of which have been thriving since the sport's early days and a mechanism that many credit as the life blood of the sport when mixed martial arts didn't have a prayer of getting television air time) as the vehicles behind the IFL's soaring stock price.
All in all, Dorfman's piece is a red flag to those seriously considering buying into the IFL.