WWE Network Stock Price May Drop, Will Vince McMahon’s Net Worth Plummet Again?
The WWE Network stock price may be in danger of dropping according to Zacks Equity Research, so what would this mean for Vince McMahon’s net worth?
In a related report by The Inquisitr, the WWE layoffs last week had the company shedding a good seven percent of its employees in order to cut costs. But since the WWE Network subscription numbers are way below previous estimates it’s possible management will be forced to figure out other ways to tighten its belt in the short term. Rumors claim that some of these WWE budget cuts will including less pyrotechnics at WrestleMania 31.
The WWE stock price is currently at $13.97, but that is nothing compared to its March peak, which had the WWE Network stock price floating around $32. When the WWE Network subscription numbers were announced after WrestleMania 30, the stock plummeted. The most recent plummet was in the middle of May, which brought it down to around $11, but even though it’s been on a slight upswing ever since Zacks Equity Research believes the WWE stock is being overbought:
“[The WWE stock] has moved higher as of late, but there could definitely be trouble on the horizon for this company. That is because WWE is now in overbought territory with an RSI value of 70.61. RSI stands for ‘Relative Strength Index’ and it is a popular indicator used by technically focused investors. It compares the average of gains in days that closed up to the average of losses in days that closed down; readings above 70 suggest an asset is overbought, while an RSI below 30 suggests undervalued conditions are present. Yet WWE’s high RSI value isn’t the only reason for investors to be concerned, as there has been some decidedly negative earnings estimate revisions in World Wrestling Entertainment’s stock as of late…. World Wrestling Entertainment also has a Zacks Rank #4 (Sell) which puts it into unfortunate company among its peers. So, given all of these factors, investors may want to consider exiting this stock now before it falls back to Earth.”
In wrestling lingo, it’s possible Vince McMahon’s net worth is about to be given the chair… again. Vince retains 81 percent of voting shares stemming from his personal ownership of 57 percent of publicly traded class A shares, and 87 percent of preferred voting class B. All in all, there are about 33,173,259 shares outstanding, so every time the WWE stock drops $1 McMahon loses $18.9 million. This means McMahon’s current net worth is about $264 million based upon WWE stock, although he supposedly has another $270 million that’s not tied up into the fate of the WWE Network.
But Vince McMahon could be losing money steadily until investors believe the WWE Network profit is sustainable over the long term. The company is currently losing money each quarter and, besides cutting costs like they’re currently doing, the only way management can turn around the ship is to get those WWE Network subscription numbers up. It’s hoped the global launch into 170 countries will help, but even then they are only a little over two-third of the way to the break even point.
