There’s been a significant shakeup at World Wrestling Entertainment and many investors don’t appear pleased. WWE reported some disappointing earnings estimates for Q4 2019 Thursday, then dismissed co-presidents George Barrios and Michelle Wilson effective immediately. Their stock plunged by more than 20 percent in after-hours trading shortly afterwards. Kamaron Leach and Christopher Palmeri of Bloomberg have more on the changes and the investor reaction:
World Wrestling Entertainment Inc. ousted two of its top executives after 2019 earnings came in at the low end of estimates, a shake-up that has rattled investor confidence in the pro-wrestling giant.
…Frank Riddick, a board member for more than 11 years, has been named interim chief financial officer, WWE said Thursday. He’ll report to Chairman and Chief Executive Officer Vince McMahon, the billionaire who often serves as the face of the company.
“The board and I decided a change was necessary,” McMahon said in a statement. “We have different views on how best to achieve our strategic priorities.”
This may be about more than just strategic priorities, though. As per that piece, WWE revealed Thursday that they now expect to report earnings of $180 million for Q4 2019: that’s below the $190 million figure that had been bandied about by some, and below the $186.6 million consensus forecasts projected. So there are some earnings challenges there. And the after-hours selling of their stock appears to be about some skepticism around the fundamentals of the company as well as the executive turnover. And that selling is significant; as of 7:56 p.m. Eastern Thursday, WWE stock was down to $47.85 per share (as per Yahoo Finance), $14.45 and 23 percent below its closing mark of $62.30 (at 4:02 p.m. Eastern).
With that said, though, these executive changes are also a big deal, especially given the longevity of Barrios and Wilson. Barrios had been with WWE since March 2008, while Wilson had been there since February 2009. They were elevated to the co-presidents role in February 2018, not long before WWE signed its Smackdown deal with Fox. But the audiences there haven’t been as large as WWE would have hoped, and it’s notable that there have already been some changes there, including replacing Eric Bischoff with Bruce Prichard as executive director of Smackdown in October.
At any rate, it’s certainly notable to see both these executive changes and to see the stock plunge. And while one day of stock data isn’t necessarily determinative of where WWE will go in the future, this definitely isn’t a good data point for them.