A WWE stock holder named Curtis Swanson is targeting Vince McMahon specifically with a class action lawsuit that claims the WWE boss mislead investors on the potential for the WWE stock price. In addition, the WWE lawsuit names CFO George Barrios and the company at large for various misdeeds.
In a related report by The Inquisitr, back in August the separate law firms of Alfred G. Yates Jr. and Vincent Wong, Esq, both independently started a class action lawsuit targeting the WWE. Similar to Swanson, they made specific claims about how the WWE management supposedly misled investors about the WWE stock price.
“[The WWE lawsuit is] representing people who purchased stock between October 31, 2013, and May 16, 2014. The complaint, like the other few similar ones, allege the company issued materially false and misleading statements regarding the company’s ability to negotiate a television contract price. During the period, the company issued releases showing its ratings being similar to NASCAR, with the idea that would be a barometer of what WWE could get for rights fees. However, WWE’s new deal ended up being worth less than one-sixth of what NASCAR’s television deal was.”
Since the last time we published on this subject the WWE stock price has generally fluctuated within a certain a range. Today the closing bell saw the WWE stock price drop slightly to $14.46, which amounts to a one percent loss for the day. The WWE stock price has not seen any great strides toward recovering its losses made earlier in the year after it was revealed the WWE Network subscription numbers were not on target the company would be leaking money for the foreseeable future.
The reason that Swanson is targeting Vince McMahon and George Barrios personally with his WWE lawsuit is because of statements made during a presentation at the December 2013 UBS Global Media and Communications Conference. The lawsuit alleges McMahon and Barrrios knew the following but chose to conceal the information about WWE stock holders:
– WWE’s ability to command premium pricing for its television license agreement was significantly undermined by the Company’s rollout of the WWE Network.
– WWE’s ability to command premium pricing for its television license agreement was significantly undermined by the low advertising rates for professional wrestling compared to other live sports
– As a result of the foregoing, there was no reasonable expectation that WWE could double the value of its domestic television license agreement.
The deal that McMahon eventually made with NBC Universal did result in an increase from $57 million to $92 million per year but that was significantly less expectations. Swanson believes “the negative impact on the television license negotiations [resulted] from the Company’s launch of its WWE Network, a 24/7 subscription-based streaming network containing pay-per-view events and original and historical programming.” The lawsuit alleges that the defendants “(i) made false and misleading statements, (ii) engaged in a scheme to deceive the market, and (iii) engaged in a course of conduct that artificially inflated the price of WWE securities and operated as a fraud or deceit on Class Period purchasers of WWE securities by misrepresenting the Company’s business and prospects.”
According to PWInsider, Vince McMahon has until November 25, 2014 to file a motion to dismiss the class action lawsuit based upon the WWE stock.