WWE Stock taking a massive nose dive

[scomvp316]

This has come as no surprise
It was expected after the first enrollment figures WWE's stock was going to take a massive hit Even if they got to 1 mill subscibers the stock would still be free falling
I don't think it will go back to around 13 but will hover between 17-20
Alot of investors just don't like the portfolio
In alot of ways as usual of late WWE has over analyzed their market worth towards entertainment
No question they are the kings of wrestling with as much as a 95% market stake

It looks like TNA has given up without really trying at any given time
When you try to go after a bigger company's market share you must be different in every way
Even if WWE was to have a major scandal it wouldn't help TNA one bit
The old business quote: to compete against the market you must beat your own numbers consistently before a serious run against the market

ROH just needs a step up in production
They have the right concept in just putting on the best show possible and trying to improve without worrying about what the competition is doing
If the rumor is true and AMC buying out SBC rights to ROH this could be a huge step up for ROH
The only reason TNA is around these days is because ROH doesn't have a big tv deal

As of right now UFC is clobbering WWE in gaining new fans of all demos
Nielsen did a analysis of WWE less than six months ago and within the next decade unless WWE changes their format they will only garner between 3-5% new fans of demo 7-12 Thats the lowest ever under VKM The last two generations numbers of that demo was on average 21% including when they went to TV-14
WWE doesn't need to go to TV-14 but clearly a PG-13 is in need
The philosophy that only faces can drive this company was proven to be wrong 20 years ago
What drives fans to the shows is good characters
Not just faces but a really good heels
Most fans have figured out if you are a top face you will win most of the time
That formula died out along time ago
SCSA was considered a face but was anti-hero
It worked because of real emotion into a multiple of characters
The minute WWE forgets about what certain political groups think of their programming the more new fans of all demos will flock to WWE
Without sponsorships in this company they would barely be getting to 400 mill
Their is a very good reason why Vince is heavy with sponsors these days
The bottom line is weak
400 mill in todays market for any entertainment company is considered average at best
We all know the real focus for WWE these days is against other entertainment companies seeing other wrestling promotions are barely staying above water
I honestly believe as a longtime WWE fan if they tried extra hard in creative to compete against other entertainment entities then just wrestling revenue would reach 1 bill instead of scuffling along around 700 mill with heavy sponsors and other related revenue that is not affiliated with wrestling

 

[Defiance187]

You'd think the stock would rise considering the WWE Network, the current state of the WWE (storylines) etc.

 

[beckyh]

I don't think the network did as well as expected. When the date got close to opening, there were reports that it would need 1 million subscribers to break even because of the price point of the service. Even if that is not true, perception is almost everything when it comes to stocks.

 

[scomvp316]

The only way this stock would of rose post WM would be based on 2 mill network subscribers and quality storytelling for mid-card to main event
Looking back as far as JCP they would have 5-7 good stories for every major event
AE on average has 4 good stories each major event
For wrestling to be really good again you must keep the fans guessing
It started with the streak ending but no other real surprise
I understand the no competition within wrestling but if it was my company no matter what I want to put on a great show every night regardless of competition
Sure their are no real competitors in wrestling but VKM can compete against other entertainment companies
Try to make WWE the best company period

 

[scomvp316]

WWE's bottom line is considered by alot of investment firms as "Toxic"
Alot of expense with little return
I believe last year revenue was around 680 mill and the NP was under 130 mill

The one thing this network is missing is downloads
You can have daily download limits like some porn sites have
From the 670,000 early enrollments it wouldn't shock me by SSlam if those numbers are around 400,000
The biggest question most investors have is how many of the 670,000 will stay after the six month comittment because most of those customers just wanted to see WM

 

[JJ15776]

This is why people on wrestling boards who don't know anything about business shouldn't talk about stock prices. I guarantee you Wall Street Journal message boards aren't talking about who should join the Real Americans, for the same reason. You stick to what you know. (Unfortunately, a lot of people on this site don't know enough about anything to discuss it publicly, but I digress.)

Everybody knew WWE's stock price was going to drop. This wasn't unexpected, nor is it a massive nose dive. It's a predictable drop that was very predictable.

I don't even know what "In alot of ways as usual of late WWE has over analyzed their market worth towards entertainment" means because it makes no sense in the context of their stock price. They don't set their stock price, they have no say in what their stock price is, that's up to the market. And 400,00 subscriptions by SummerSlam? LOL, ok. They'll be a hell of a lot closer to adding 400,000 to their initial 667,000 than they will be to dropping to 400,000. It's not about how many they will lose, because that number will be immeasurably small, it's about how many they will add. Remember, they're very likely to double that initial number in the next year.

Bottom line is, business wise, the WWE is healthier than ever. People bitch and moan about the product, and that's fine, but the company is as strong as it's ever been and only getting stronger. The WWE Network will continue to grow, continue to get better, continue to bring in more money...and, perhaps most importantly, it gives them extra negotiating leverage with networks bidding on their TV rights. Because they now have no fear of walking away from any network, because they don't need a network. They have their own network, and they can put every TV show they have on there if they want to. That's just going to bring in that a TV rights deal that is that much better, meaning even more money and even more exposure.

Believe me, WWE knows what they're doing. It's not difficult to see how well they're doing.

 

[scomvp316]

Yeah I know nothing about business seeing I have a business degree
I am sorry but any stock that goes down 20% in one day isn't a good thing
If they are so strong then why do they need all the sponsors
At no other time in the history of this company have they had so many sponsors
More than during Attitude when they average over 10 mill viewers for Raw and were doing well over 1 bill in sales
Of course they have over analyzed
VKM was hoping when they went PG he was going to get the same amount of 7-12 demo that he had in the 80's That hasn't happened
Stock prices of today represent the potential of your company six months down the line
Many investment firms have said WWE's portfolio is too risky
When you over analyze your company especially a public trading company you risk some set backs
WWE for the longest time has compared themselves to Disney
Investors have estimated WWE around 2.6 bill worth and Disney almost 150 bill
I think thats quite the contrast

 

[Justin Satiable]

Yeah I know nothing about business seeing I have a business degree
I am sorry but any stock that goes down 20% in one day isn't a good thing
If they are so strong then why do they need all the sponsors
At no other time in the history of this company have they had so many sponsors
More than during Attitude when they average over 10 mill viewers for Raw and were doing well over 1 bill in sales
Of course they have over analyzed
VKM was hoping when they went PG he was going to get the same amount of 7-12 demo that he had in the 80's That hasn't happened
Stock prices of today represent the potential of your company six months down the line
Many investment firms have said WWE's portfolio is too risky
When you over analyze your company especially a public trading company you risk some set backs
WWE for the longest time has compared themselves to Disney
Investors have estimated WWE around 236 bill worth and Disney almost 150 bill
I think thats quite the contrast

My kingdom for a full-stop!

You're throwing around a lot of crazy numbers here. I honestly can't see the WWE being viewed at 236 billion dollars OR being worth more than Disney. I can't see them being close to Disney, in fact. EDIT: I see you corrected that as I was posting. 2.6 makes a LOT more sense.

Why do they have so many sponsors? Is this even a real question? MONEY! Companies like to make money! In the Attitude Era companies wouldn't sponsor the WWF because it was raunchy and gave off a negative image. In the PG environment a lot more companies are willing to invest. That's why there's more, not because the company is desperate for cash, that's just absurd.

 

[scomvp316]

Is it really absurd
Most of those sponsors that WWE has today started around mid to late 2007
Thats when the first signs of a great recession was starting
One investor I know said as much as 300 mill is being dumped into WWE every year by sponsors
Mattel is right around 200 mill
We all know WWE doesn't sell 200 mill worth of action figures
Most companies when they initiate a sponsor they are expecting almost double in return
As far as the TV-14 compared to PG and sponsors thats inaccurate in todays entertainment business
I believe back in the 90's you didn't get alot of sponsor driven shows
I saw a stat last week at no other time than in today's entertainment that almost 90% of shows on network and cable are TV-14
The net worth number was a typo
WWE is critiqued around 2.6-3.1 bill

 

[Jack-Hammer]

It doesn't surprise me at all. I'm no financial expert and can't pretend to be, but I'm honestly not seeing why so many have suddenly become so nervous. Maybe they know something I don't but, from where I'm sitting, I'm just don't see where there's a problem. WrestleMania XXX was a great show, the WWE Network didn't have any issues regarding lag or connectivity issues, Raw was a very hot show to follow things up, younger & fresher talent is being prominently pushed. If anything, it looks to me as if optimism among investors should be pretty high.

Speaking of the WWE Network, again, I don't really see what the issue some investors seem to have. WWE has stated that it's goal is to reach 1,000,000 subscribers by the end of this year and it was announced Monday morning that the network had well over 667,000 subscribers. I was honestly expecting somewhere in the 500,000 to 600,000 range and the few articles I've read from analysts state that the 667,000+ was on the high end of their expectations. Maybe investors had some sort of unrealistic expectations in mind. I dunno....maybe I'm just goofy, but having fairly near to 700,000with a year end goal of 1,000,000 paying subscribers only 7.5 weeks after launch sounds pretty good to me; it was only the first week of April when the numbers were announced and there's nearly 8 more months left in 2014.

 

[scomvp316]

I think alot of investors were hoping for 1 mill subscribers
Like I mentioned in the OP we will see how many of 670,000 are still subscribers around SSlam
I would expect around 800,000 subscribers
I would imagine there will not be a detailed report of the # of subscribers How many of signed up when the network launched The demo of the subscribers A detailed report with that type of info will probably never be released unless inquired through proper SEC channels

 

[zomigosh]

It doesn't surprise me at all. I'm no financial expert and can't pretend to be, but I'm honestly not seeing why so many have suddenly become so nervous. Maybe they know something I don't but, from where I'm sitting, I'm just don't see where there's a problem. WrestleMania XXX was a great show, the WWE Network didn't have any issues regarding lag or connectivity issues, Raw was a very hot show to follow things up, younger & fresher talent is being prominently pushed. If anything, it looks to me as if optimism among investors should be pretty high.

Speaking of the WWE Network, again, I don't really see what the issue some investors seem to have. WWE has stated that it's goal is to reach 1,000,000 subscribers by the end of this year and it was announced Monday morning that the network had well over 667,000 subscribers. I was honestly expecting somewhere in the 500,000 to 600,000 range and the few articles I've read from analysts state that the 667,000+ was on the high end of their expectations. Maybe investors had some sort of unrealistic expectations in mind. I dunno....maybe I'm just goofy, but having fairly near to 700,000with a year end goal of 1,000,000 paying subscribers only 7.5 weeks after launch sounds pretty good to me; it was only the first week of April when the numbers were announced and there's nearly 8 more months left in 2014.

I was under the impression that the WWE was looking to the million subscribers by Wrestlemania. How exactly are they going to get 340k more now, and keep the others? Wrestlemania is over, the biggest selling point (and I'm sure for a lot only) to the network. It'll only go down from now, which is why people are selling. It doesn't matter how good the product is right now, sadly. The price was extremely inflated anyway , so I'm sure a lot of investors thought they weren't going to get any better now and to sell to make a quick buck.

 

[scomvp316]

One of the telling signs was within that first week WWE had sent out feelers of possibly going up next year 12.99 or even 14.99
Don't get me wrong I am a huge WWE fan no matter what
This network still has alot of potential
I do believe WWE needs to digitize the library
Last time which was about six months ago the CFO mentioned only 75%
Thats a shame seeing they have had most of the library since 2002
I would love to see downloads on this site
You can have daily limits to insure the subscribers we will stay for the entire six months
At some point WWE will also have to purchase movies
One of their end goals is to make it the premiere entertainment network

 

[faltemer]

You claim to understand business but seemed to think if they had 1 million or a little over that the stock would still be free falling, which by every estimate is simply incorrect. Furthermore you thought stories told in their show would affect stock prices? I don't even think you know what a stock is. Just to explain, storylines alone will have zero affect on stock price. If overall profitability and value of the company goes up, the price goes up. If it's assumed they will go up, the price will go up. And vice versa. Nothing else makes the price move.

Under 700,00 subscribers means for most events they are gonna pull in around 75% of what they normally would do, as long as no one buys the PPV. That remains to be seen, so the stock could rise again after ER, if the members remain the same and the PPV buys are actually somewhat decent. I feel this isn't going to happen so i see no reason the stock doesn't continue to fall until 15 or so.

If they manage to get a really good deal with a new network other then USA or greatly increase their deal with USA/others their price will rise again, due to their business now being worth more.

 

[MB1025]

It doesn't surprise me at all. I'm no financial expert and can't pretend to be, but I'm honestly not seeing why so many have suddenly become so nervous. Maybe they know something I don't but, from where I'm sitting, I'm just don't see where there's a problem. WrestleMania XXX was a great show, the WWE Network didn't have any issues regarding lag or connectivity issues, Raw was a very hot show to follow things up, younger & fresher talent is being prominently pushed. If anything, it looks to me as if optimism among investors should be pretty high.
.

So what your saying it is the same song and dance.

Great WM, great Raw afterwards, and in 2 months we go back to bitching about everything.

 

[enviousdominous]

In terms of their flawed business model, I think that the WWE is slowly but surely getting back to a show that's similar to what they produced back in the late 90's in structure and not so much in substance.

I think that the launch of the WWE network was a means of combating piracy that follows the strategy of Apple when they launched iTunes. WWE used to have a service called "WWE 24/7" that was cheaper but it only offered events in small doses. The WWE Network is a revamp of that service and it seems that it's a slightly more expensive way to get almost their entire video library in high definition. The flip-side of raking in subscription fees for that kind of access is that now anyone who bothers to look for a program on the internet that can rip streaming video has access to that video library and could conceivably record the more marketable events for their own financial gain. I think that it's impossible to determine the long term potency of the WWE's stock when they're taking these kinds of risks.

 

[Sabutage]

something else that hasnt been tappped into yet is the international market. If wwe launched the network in europe, i think theyd pass 1 million subscribers worldwide relatively quickly.

 

[scomvp316]

Storylines does affect stock prices
If you don't have characters people aren't interested in then PPV buys will be down,live event ticket sales will be down,and finally merch sales would be way down If you can't streamline revenue then your company's stock will go down
The characters portrayed on tv are assets
You have to fully utilize each asset if you want to make money
So storylines are very important of the company making money

Stock prices today reflect what your company might do six months from now
Many investors wanted around 2 mill subscribers which would entail almost 40% of viewers in the US market

 

[StalinTheTerrible]

I'm really waiting on WWE Network in the UK because it costs £22 per month for the channels that WWE is on and I also have to pay £18 per month for the PPV so in reality it's a no brainer to go for the network providing WWE has a good price. Once WWE network hits the UK and Europe (I'm no expert here) Investors will be happy.

 

[Sabutage]

I'm really waiting on WWE Network in the UK because it costs £22 per month for the channels that WWE is on and I also have to pay £18 per month for the PPV so in reality it's a no brainer to go for the network providing WWE has a good price. Once WWE network hits the UK and Europe (I'm no expert here) Investors will be happy.

I thought UK fans get a pretty good deal. I thought the price is £15 which is cheaper than America and some ppvs are free throughout the year unlike America.

 

[Mustang Sally]

I don't understand why stocks behave as they do, although I've read that many stockholders are "weak sisters" that panic at any change in the market, real or perceived, and keep the system from ever being stable (I never cared for the term "weak sisters" either. Aren't there any "weak brothers?" )

If someone pressed me for reasons why the WWE stock dropped so suddenly, I'd point to business factors that investors often misinterpret. For one thing, many folks see the WWE Network come into existence and suddenly get all upset about the capital outlay the company has effected, seeming to feel that the entire expenditure took place in the days before the Network opened for business. Of course, it's not so; the money was spent over a period of a few years.

Consider the WWE library (which includes WCW, ECW & WCCW libraries); the money to purchase them was spent long ago; the libraries just sit there until the company is ready to use them.....and best of all, they present no further cost; WWE owns them and will now generate income from them. No need for stockholders to get upset about that capital outlay; it didn't come out of current earnings.

The rest of the money needed to build the Network probably comes to less than Wall Street believes; it largely involves putting together the technology needed to operate it. The equipment and fixtures needed had to be purchased, of course, but this was undoubtedly done over time; WWE didn't have to write a check out of operating income the day before the Network came into existence, for pete's sake.

Yes, if stockholders are terrified that "only" 667,000 people subscribed (in the first couple weeks) is an indication that the whole thing is a horrible failure and that WWE will be bankrupt in the near future because of it, they're going to sell their stock in a blind panic ("Oh my God! They needed 1 million subscribers! The sky is falling! Oh, no!") then let them sell; what can WWE do?

Presumably, it will all stabilize and the market will soon return the WWE stock to it's true value, based on the principles of good business practice; the company is (and has been) profitable, operations are proceeding smoothly, and TV ratings going up or down a bit at a time don't determine whether WWE will be here (or gone) tomorrow.

 

[scomvp316]

The library needs to be 100% digitized
Every major entertainment company since 2010 has been 100% digitized in HD
18 months ago WWE took out a line of credit from Citi Corp for 500 mill to pay for the costs of this network and that was concerning as well
No tv deal has been announced but for WWE thats done on purpose so then for Q3 you will see big uptick for the stock which Q3 usually has significant less gains coming off of WM
Finally before the line of credit was issued many investors were concerned of the high % of costs compared to GP where many investors have instructed WWE on a consultant basis to make changes to their module or within five years you could see major losses

Those are the reasons why the stock took a big hit
Network subscribers was a positive # but not greatly enough
Live Event ticket sales are still concerning near 10% lost seeing why WWE had made a deal with KMart to cut the loss in half Initially in 2008-2010 a deal was made with Ticket master but that deal was a short term fix and thats why we see a good sponsor with KMart that has similar net gains like Mattel

 

[StalinTheTerrible]

I thought UK fans get a pretty good deal. I thought the price is £15 which is cheaper than America and some ppvs are free throughout the year unlike America.

It seems my tv provider is screwing me and yes, we do get free PPV sometimes which I have to admit is quite good.

http://www.sky.com/shop/tv/sports/ - My provider

 

[Kizzani]

The stock is failing because of bad script writing and unbelievable crap.

Wrestling is fake 99% of the population knows this, taking in to count the 1% of children and over grown children who still think it is real. But just like a movie it doesn't matter how many amazing actors you place in a movie if the movie has a bad script and the actors are not selling the movie well it will look bad ( Take "Movie 43") a huge cast of actors award winning actors, but the script was so bad and the selling of the actors was so much worst it really blew.
Stone Cold Steve Austin, when he spoke you listened, when he stood up vs McMahon he is a big guy so you believed it. Now you look at CM Punk who tried to do the same, it just seemed so fake. Having CM Punk take on all 3 members of the shield and dominate was fake on top of fake. There are so true bad asses in the world and some are smaller than other (Hoyce Gracie). But if the selling is not there, the story sound unbelievable and you lose that sense of excitement.
Daniel Bryan beating triple H clean, then going on to beat Batista, Orton and triple H at ringside. Is a super Human feat. Triple H is not a punk push over, Neither is orton and batista ( you'll see what they do for the tag division). But Bryan made them look like chumps, for no other reason that to make the fans happy. It is like when you're playing a game verse a 5 year old and you let him win, you son kicks the ball at the goal and you dive at he ball but miss on purpose. He is so happy he scored on dad he get so excited. (That is what I saw with the D Bry win). Main event at Mania could have been D bryan who has a 45 minute match with Triple H and just outlasts HHH. Then move on to get the title from Batista ( who triple H never beat) The world title match could of played second fiddle to HHH and Bryan, Bryan wins at the end of the night the fans are excited, title or not.
Or even better yet have The rock, SCSA and Hogan involved int he 3 way match at the end. This way the story seems more real and Batista, and Orton got beat because of so serious superstar power. This takes nothing away from Bryan who already beat HHH clean earlier and still gets him the title. Most fans only care about this. Those fans are not buying stocks.
Then you go ahead and take away a HUGE selling point like the Undertaker's streak and give it to Lesnar, who a smart investor knows Lesnar is a bad investment. Give it to a undefeated wrestlemania guy ( they are limited) so they can continue the streak. So when you put your company into the hands of a Goat and a Quitter....Did you think the stock would rise? Seriously.
Some people went out and bet money on the taker winning and lost a lot. So to make up that money and hurt the wwe you go out and sell that stock. So sure you made the lowly fans happy, but the real money just went walking.
Your losing fan base because not only are taking out the little bit of realism in a fake world, but you have nothing else.

 

[scomvp316]

Great new article on WZ with a current WWE investor and why he thinks the stock took a huge hit and what the future holds for this company
The biggest problem with WWE Studios is the name itself
When this company was averaging well over 10 mill viewers a week and sales were over 1 bill that was the time to invest into movies and possibly other non-wrestling tv shows
I am not sure if now they can fully invest into projects with limited capital
They had to take out a 500 mill credit line from Citi Corp to pay for the network
Thats the type of cash it takes to start a serious production company for the long term
The best thing for WWE is what they are doing now and purchasing scripts and letting hollywood deal with the production side and WWE takes care of social media and DVD/Blu-Ray distribution
If it was me try to purchase some independent comic stories like "DeadPool" and partner up with a tv production like AMC and build your non-wrestling entertainment from that
WWE should get on either comic stories,sci-fi,and or horror to start their own brand of tv shows thats not wrestling related
I would scrap the idea of movies for now
The best production company they should have a working relationship with is either Ben Affleck's or Brad Pitt's new production company
But just my opinion