WWE Stock Down Significantly, WWE Network Blamed

WWE’s stock has been something that has been talked about a lot as of late, with it approaching record numbers ever since the launch of the WWE Network and in anticipation of WrestleMania XXX.

However, the stock has apparently taken a turn for the worse, with a bleak outlook ahead.

USA Today has published a look at the current state of the WWE stock, which closed Thursday at $21.12. This was preceded by a 22 percent decrease Monday into Tuesday, around time when news of The Ultimate Warrior’s death hit the airwaves.

The largest area of concern is the state of the WWE Network, an entity which, while pleasing for customers, has not brought in nearly as many subscribers as anticipated. Initial projects for the launch of the network had called for about one million subscribers, but as of the most recent outlook, only 667,000 people or so had actually signed up. It is for this reason, according to the report, that many have been advised to sell on the stock.

“WWE is facing multiple challenging factors, including underwhelming subscription figures for their WWE network in addition to a multi-year negative earnings trend, suggesting that the firms’ intrinsic value is materially lower than the current stock price,” says Lemelson Capital chief investment officer Emmanuel Lemelson.

This was even something that had been pre-meditated.

WWE conceded in its annual statement that it lacks expertise in its subscription model and “could experience significant setbacks” monetizing the service. The company posted a fourth-quarter operating loss of $12.2 million, compared to income of $2.6 million in the year-ago quarter, due mostly to investments in WWE Network.

Some, however, disagree with the state of the numbers and feel there is some optimism still.

“The subscription numbers for the new WWE network are very solid and healthy,” says Kim Opiatowski, an analyst for The Vertical Group. “The stock may have gotten a little ahead of itself, and a lot of momentum names have been fading. And people may have also taken money off the table.”

WWE’s stock reached as high as $31.98 earlier this month, but has since leveled out significantly.

The rest of the article can be found here.

Editor’s Note

I, for one, do believe this is something of great alarm for WWE. I always thought the projection of one million customers off the bat was a little high, and this is starting to prove there could be some ramifications of falling short of goals. Could this result in a price increase for the network?

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