Rumor Control: WWE Almost “Counted Out” on the Stock Market

WrestlingRumors.net and WrestleReaction.net’s own Frank Manzo brings to you a column designed to confirm or debunk the latest in wrestling rumors.

It’s called “Rumor Control,” and in each edition, Manzo aims to calm the IWC down (or do the exact opposite) when rumors start to get out of hand. Follow him on Twitter @Fmanzo3.

Well, that was a rough Friday for WWE Stock.  In the past 48 hours, financially, WWE has taken a Stone Cold Stunner, Sweet Chin Music, Tombstone Piledriver, Hogan Leg Drop, and Rock Bottom all at once.  If you’re following financial sites or columns, you’d probably think WWE is as doomed as TNA is right now, and they’re wrong!

A little over 2 months ago, all sorts of WWE rumors were hot about their new television deals and possible corporate mergers.  ESPN was contacted for television rights, AMC was rumored to possibly become a partner of WWE, and other headline-making chatter was spread.  THAT is why WWE stock reached over $31 per share, where it never should have gone.

The problem with the stock market is that speculation can wrongly send a stock up or down, and that’s exactly what happened 2 months ago.  Nobody had to be an expert to rule out the AMC merger, you just had to know the McMahon family past and understand their way of doing business.  It also didn’t take a genius to figure out that ESPN probably wasn’t going to air WWE content, because nothing else on their network is scripted!

One thing that is certain in the stock market is CORRECTION.  It happens, whether sooner or later but it always happens.  Much like I think the whole American economy is overvalued at this point and soon going to take a tumble, WWE did exactly that.  All of the above rumors added to a WWE Network launch (that originally had a more positive outlook) had positioned WWE stock value above $31, a price it never should’ve reached until they actually did sign one of these monster deals that were rumored.  I’m not worried though.

Yes, Vince McMahon lost over $340 million today.  Yes, WWE Stock price has dropped over 64% in the past 2 months.  Yes, the WWE Network has not reached the amount of subscribers initially projected.  BUT, as Vince McMahon wrote to the Wall Street Journal today, the WWE Network gained 660,000 subscribers in its first 42 days!  That amount is more than ANY other Streaming Network has ever signed up in an equal amount of time.  Those numbers also project them to reach over 1 million subscribers by the end of 2014.  Who’s worried?  Not me.

Think of this as a WWE storyline.  The underdog (WWE) rose to the top and won the championship.  They ran with it for 2 months.  After that time, because of unnecessary interference (The Authority?), they lost their World Title in unnecessary fashion.  What’s next if that person is an established star like WWE is?  You get back to training, build your brand, and capture that gold at a later date.  WWE will.

I’m very optimistic with the WWE Network doing very well with the technical aspects now and a whole bunch of interesting content.  I’m also optimistic because of the current WWE roster and how many quality wrestlers are on the roster.  One of them will be the next star.  Somebody will take the ball and run.  It’s not the greatest time for most businesses in the modern-day economy of the United States and WWE would hardly be the first company to ride a stock market rollercoaster because of speculation and unfounded value.

Vince McMahon and company will rise again.  He’s not going anywhere, no matter what Lemelson Capital has demanded after buying stock in the company.  WWE has seen many droughts, most notably in the mid 1990’s, and this will not be nearly as bad as that.  With plenty of future stars, the beginning of a fan-friendly business plan, and a smart, experienced, level-headed Triple H to help steer the ship, I think WWE is headed for better times again.  How soon?  Nobody can exactly tell that.  However, I won’t be surprised to see WWE’s stock value return to its average $18 per share in the next 12 months.  Say your prayers, eat your vitamins, and believe in Vincent Kennedy McMahon because he always makes things happen!