While it is not confirmed that WWE committed any law violation, currently Shareholdersfoundation.com is claiming that WWE is under investigation for “potential securities laws violations” by an unnamed lawfirm. This would be the first time WWE would be under investigation for something like this.
WWE is not without controversy, and has had lawsuits filed against them numerous times. Vince McMahon even appeared before a grand jury due to the whole steroid controversy years ago, where if convicted, he could have spent years in prison and we may not see the WWE we do today.
Currently, the lawsuit that Shareholders Foundation reported says that the lawfirm is investigating a series of statements regarding whether or not the WWE, regarding it’s business, it’s prospects and it’s operations were materially false and misleading at the time they were made.
Shareholders Foundation happens to be a website that alerts stock holders when the company they have stock in is under investigation. The issue is that they have yet to name the lawfirm. They did also speak a bit on what WWE claimed to their stock holders, saying:
World Wrestling Entertainment, Inc. reported that its annual Total Revenue rose from $484.01 million in 2012 to $507.97 million in 2013 while its respective Net Income fell from $31.43 million to $2.76 million. Shares of World Wrestling Entertainment, Inc. (NYSE:WWE) grew from $7.72 per share in late 2012 to as high as $31.39 per share on March 20, 2014.
On April 7, 2014, World Wrestling Entertainment, Inc. announced that it has changed the location of its Annual Meeting of Stockholders to be held on April 25, 2014. Shares of World Wrestling Entertainment, Inc. (NYSE:WWE) declined from over $31 in March 2014 to as low as $19.65 per share on April 11, 2014.
On April 28, 2014, NYSE:WWE closed at $19.51 per share.
Basically, it would be a lie if WWE claimed they made over $500 million, when they netted $350 million or even $600 million. If WWE lied claiming to have made more or less, then they obviously would have violated law. This would also hurt their stock market base, because no one wants to invest in a company that they cannot trust with their money.
WWE recently had it’s highest stock rate of all time. So this is a bit weird that WWE would have an investigation regarding their company, seeing as they are successful. WWE is also in the process of getting a new TV deal that is currently being evaluated for over half a billion per year. So, WWE is by no means dying off. As a result, the investigation will be interesting to see.
The main issue with this is that they want to protect the investors. Some numbers could be forged or put in place to better the stock or look of a company for a time. Despite the success of WWE now, it could have not had the numbers it claimed. So in order to get the numbers it wanted, the WWE may have lied about numbers at the current time. Obviously we do not know that for sure. The investigation is looking into it.
WWE could have a huge issue on it’s hands or may simply have a misunderstanding. WWE may have done wrong, but as of right now, we do not know. Once the investigation is complete, we will know more. However, investigations such as these could take a while to complete.
Guyism, who also reported on the story, received an email from WWE stating:
“The claim that Shareholders Foundation is allegedly investigating has absolutely no substance or merit.”
We shall see if there is an actual issue here or just WWE trying to do damage control. Keep it to IQ for more as we know it.