Bad day at the office for WWE

[Postman Dave]

Vince McMahon lost $340 million Friday as shares in his WWE took a beating from investors, dropping 42% by 3 p.m. That knocked the WWE boss out of the billionaire ranks, putting his net worth at an estimated $760 million.

The stock fell after news that WWE had signed a new television deal with NBCUniversal for less than some investors had hoped. Benchmark analyst Mike Hickey estimated WWE got a 50% raise over its last TV agreement, but he expected the new deal to pay WWE double or triple its previous one.

“The company’s valuation could take a heavy beating this morning, as the new domestic TV deal with NBCUniversal likely disappointed investors,†he wrote in a report downgrading the price target for the company’s stock from $29.12 to $19.96.

WWE executives kept an even tone but offered little additional guidance. “We never commented publicly on the expectation,†said George Barrios, chief strategy and financial officer. “We said we were undervalued by the math that we had done.â€

The new TV deal hit at a turbulent time for WWE and McMahon. The company’s shares shot up 89% in the first three months of 2014, and McMahon’s net worth peaked in mid-March at $1.6 billion. But shares dropped 29% the week after WWE announced its new online streaming network had only 667,000 subscribers, taking a $325 million chunk out of McMahon’s fortune. He remained a billionaire until this morning.

Forbes

It should be noted that McMahon only became a billionaire again earlier this year for the first time since 2001. It's not like he's been one for ages.

Lemelson Capital, LLC, a private investment management firm, today announced that they had taken a stake in shares of World Wrestling Entertainment (WWE) and called on the Board of Directors to replace the executive management team of the company following a period of consistent losses, execution issues and material misstatements.

Despite the stock's roughly 63% correction since Lemelson Capital's original short call less than two months ago (from $30.37 on March 17 to $11.33 as of publication of this release), the firm today also reiterated that fair value of WWE's common stock is between $8.25 and $11.88.

Lemelson Capital's original short thesis can be found here:

"WWE has affirmed that even with one million subscribers for its WWE network, the company stands to lose between $45 million and $52 million in FY 2014, which validates the original short thesis," said Emmanuel Lemelson, Chief Investment Officer of Lemelson Capital Management. "This follows what we believe to be material misrepresentations by the company about both the performance and operating profit model of its WWE network, which the company has wrongly labeled 'a homerun'," said Lemelson.

Lemelson Capital today also called on WWE's Board of Directors to promptly replace the company's executive management team, or explore the sale of the business, and said that such changes are a necessary component of any successful strategy going forward. "For example, promoting the WWE direct network's value to shareholders without a fair and accurate discussion of the implications to a traditional network revenue circumvented management's fiduciary responsibility as stewards of investor's capital, and is part of what has emerged as a pattern over recent years. Further, there are no pending operational developments in the pipeline to offset these significant losses," Lemelson added.

PWInsider

To cut a long business story short, investors are growing nervous with WWE. The NBC deal was nowhere near what was hoped/rumoured, and the Network is still not hitting those numbers they touted earlier this year, and that's something WWE has a lot riding on.

 

[Lover Boy]

TNA's time to shine

 

[Wang Chung]

TNA's time to shine

I wish.

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