The WWE is red hot again. Here's why.

The WWE body slams its skeptics
The WWE body slams its skeptics

The WWE has cut ties with Hulk Hogan after racist comments came to light -- a rant that took place in the middle of recording a sex tape no less.

But this scandal hasn't hurt WWE one bit. The company is flying high with fans ... and investors.

Shares of WWE (WWE) (yes, it's actually a public company) are up 75% so far this year. The company reported sales for the second quarter that topped forecasts and a healthy profit.

The main reason? WWE is in the process of transforming itself into a streaming media outfit. That's right. WWE has a little Netflix (NFLX) in it.

WWE unveiled a streaming WWE Network last year. The goal was to get more of its fans to pay $9.99 a month to watch big events like WrestleMania and Summer Slam as well as gain access to the company's extensive library of older matches.

Related: Hulk Hogan vs. Gawker court showdown put off until March

It was a rocky transition. WWE shares plunged nearly 25% last year -- the equivalent of a wrestler getting smacked in the head with a steel chair -- as the early subscriber figures did not live up to expectations.

Investors were also disappointed by the terms of a new TV deal WWE signed last year with long-time partner NBCUniversal, the media arm of Comcast (CMCSA). WWE airs weekly shows on NBCUniversal's USA and Syfy cable networks.

But it now looks like the move to streaming is paying off. WWE said last week that it ended the second quarter with nearly 1.2 million subscribers for WWE Network -- an 83% increase from last year and a 31% jump from the first quarter.

People who have bet against the WWE (and there a lot of them) may be forgetting that the company remains popular because of newer stars.

It's not just about 80s legends like Hulk Hogan, the late Rowdy Roddy Piper (sigh) and Jimmy "Superfly" Snuka -- who is now battling stomach cancer. (Double sigh.)

John Cena is in the Amy Schumer comedy "Trainwreck." WWE also has a show called "Tough Enough" on USA that features people training and competing for a WWE contract.

Related: I make WWE championship belts for a living

The WWE's reality programming is particularly appealing. In fact, a reality TV mogul recently bought a sizable stake in WWE, leading to questions about what's next from the company.

John de Mol, the Dutch media executive responsible for creating "Big Brother" and "The Voice," acquired nearly 2 million shares in WWE in the second quarter -- 6% of the company's total shares.

It seems unlikely that de Mol is looking to take over the WWE -- even though one of de Mol's media firms has ties to the highly acquisitive John Malone of Liberty Media (LMCA).

WWE CEO Vince McMahon and his family -- wife Linda and daughter Stephanie -- have a controlling stake in the company through Class B shares that are not publicly traded. So any purchase of WWE would have to be friendly.

But de Mol's investment is intriguing.

BTIG analyst Brandon Ross, who has a "buy" rating on WWE, wrote in a report Tuesday that "WWE content fits perfectly with de Mol's expertise."

Related: 'Trainwreck' stars react to Louisiana theater shooting

Ross also wondered if de Mol may look to help the company develop new shows.

"He certainly would be an invaluable resource for WWE's programming and content team," he wrote.

Still, investors should tread carefully. People who've rushed into this stock before have been clotheslined by short sellers -- who borrow a stock and sell it because they expect to buy it back at a lower price.

Shorts control more than 25% of the company's total shares. That's one reason for the stock's volatility.

WWE is also extremely expensive, trading at nearly 70 times 2015 earnings estimates.

But the stock, ironically enough, does offer safety and stability for more conservative investors. Its dividend yields an impressive 2.9%.

So if you're a wrestling fan, you can do worse than owning the stock. For everyone else, keep in mind that it could be riskier than getting in the ring with Triple H.

This stock is going to live and die by its WWE subscriber numbers. They look good -- for now. But expectations are higher than one of Snuka's trademark leaps off the top turnbuckle.

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