WWE Market Value Drops $1 Billion After Co-President Exit

Analysts say the massive stock drop has hurt the overall value.

This past Thursday WWE put out the word that co-presidents George Barrios and Michelle Wilson were no longer with the company. The word is that they were forced out by Vince McMahon and the board after a possible bad 2019 Q4 report and differences in the future of the company.

According to a report from Bloomberg, John Belton of Evercore ISI states that after the 28% plunge in the stock, the value of the company has lost $1 billion. Belton cut his rating to in line from outperform and reduced his price target to $50 from $80, saying “the release announcing the changes was vague.” He believes the timing of these developments, which follow months of uncertainty surrounding several key strategic and financial initiatives, may imply expectations for 2020 adjusted operating income must be cut further. McMahon cited “different views on how to best achieve strategic priorities moving forward” as the reason for the changes.

According to Alan Gould of Loop Capital, he states after this drop he has “diminished confidence” in his estimate of the company.

Jason Bazinet of Citigroup says Wall Street “may interpret the departures as a new risk to consensus 2020 Ebitda forecasts.” He suspects that the co-presidents “may have wanted to gradually reinvest incremental US media rights revenues, while Mr. McMahon may want to make more aggressive investments.”

Finally, Eric Handler of MKM Partners says “a change in the C-Suite does not necessarily mean more bad news is coming.” He has a buy rating on WWE and a $92 price target. “Given the known step-up in the domestic TV rights deal, we do not believe the company is in a ‘precarious’ financial position.”

Next Thursday WWE will announce their Q4 earnings for 2019 and the word is those numbers possibly being low is what lead to the departure of barrios and Wilson. If the numbers are as underperforming as we are hearing, one hopes the stock does not drop too much more.