Should WWE fans brace themselves for the possibility of WWE's tragic end?
Recent reports say that Vince McMahon lost $350 million as of market close on Friday, as shares in his WWE took a beating from investors. According to Forbes, the stock was down more than 40% since the market open. In fact, the stock, which had closed just below $20 on Thursday, opened down below $11. That immediately knocked the WWE boss out of the billionaire ranks, putting his net worth now at an estimated $750 million.
"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.
"The question is why their numbers are so low given this renewal," Wiggins said. "With the information that they put out there, it seems to imply that their core business isn't making money."
It is no secret that WWE has been suffering a massive drop in rating. It is possible that the TV deals have a steep escalation in later years, Wiggins cautioned, so WWE might not be getting $90 million a year by the time it reaches 1.5 million subscribers on the online network, which could account for the underwhelming projections.
"If that's at play here, it could kind of mitigate all of this bearishness that's happening today," Wiggins said. "There is definitely some confusion here, which is why you're seeing the stock drop."
Barrios offered little to clear up the confusion. "I don't want to talk about the specifics of how the contracts are structured," he said. "I think it's pretty typical that there is some escalation in them, but we haven't gone into detail on any of that."
What do you think readers? What can WWE do to turn things around? Sound off in the comments section below!
