Class Action Lawsuit Filed Against WWE On Behalf of Shareholders
November 11, 2020
— A class action lawsuit was filed this month against WWE by stakeholders who assert that the company’s tanking stock was due to questionable decisions made by management. There’s multiple law firms (according to the Observer Newsletter, perhaps as many as 20) involved representing investors and anyone who wants to join the lawsuit has until May 5 to do so. Below is a summary from one of the firms:
The investigation concerns whether WWE and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
On April 25, 2019, WWE disclosed disappointing financial results and fiscal guidance, which several analysts connected to difficulties in the Company’s business relationship with the Kingdom of Saudi Arabia, including a multi-year television distribution rights agreement with the Saudi-controlled Orbit Showcase Network (“OSN”) and a 10-year partnership with the Saudi General Sports Authority to host live events in Saudi Arabia. On this news, WWE’s stock price fell $13.12 per share, or 13.32%, to close at $85.38 per share on April 25, 2019.
Then, on October 31, 2019, in connection with the release of the Company’s third quarter 2019 financial results, WWE revealed significant underperformance across key metrics and revealed that its media rights deal with OSN had been indefinitely delayed. On this news, WWE’s stock price fell $10.40 per share, or 15.65%, to close at $65.04 per share on October 31, 2019. On January 30, 2020, WWE announced the departures of WWE Co-Presidents George A. Barrios and Michelle D. Wilson. On this news, WWE’s stock price fell $13.42 per share, or 21.54%, to close at $48.88 per share on January 31, 2020.
Finally, on February 6, 2020, WWE again disclosed disappointing financial performance, citing to its failure to secure a favorable broadcasting deal with the Saudi government, and revealed that the Saudi media rights deal had been completely excised from the Company’s financial forecasting. On this news, WWE’s stock price fell $4.50 per share, or 9.18%, to close at $44.50 per share on February 6, 2020.