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Three Reasons for WWE Investor Smackdown
April 7, 2014 12:10 pm
Last Updated: April 7, 2014 12:11 pm
World Wrestling Entertainment Inc. (NYSE: WWE) investors are getting a true smackdown all on their own. This is already considered to be a volatile stock, but a Barron’s bash over the weekend was felt despite the company releasing its growth figures on Monday.Source: Thinkstock
Barron’s highlighted WWE as a top stock performer that is facing cannibalization risks. The publication pointed out that shares of WWE have tripled since last fall, despite a history of poor revenue and profit growth.
Another risk brought up is that the $9.99 per month is down from $12.99 to $14.99. The report suggested that WWE expects that the new network could ultimately get 2 million to 3 million subscribers. That is meant to offset pay-per-view declines.
A drop on top of Barron’s came from the numbers after WrestleMania 30. WWE said that the annual pop-culture extravaganza grossed $10.9 million from a sold-out crowd of 75,167 in New Orleans.
On Monday morning, WWE also reported that it now has more than 667,000 subscribers and is well on its way to reaching its goal of 1 million subscribers by the end of 2014. This is said to be just after 42 days since its U.S. launch date.
The smackdown here is far worse than most investors may have assumed. The drop in late-morning trading was 21.5% to $22.00. WWE has traded in a 52-week range of $8.56 to $31.98, and the consensus price target from the four analysts listed in the Thomson Reuters coverage group is almost $35.50.
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