World Wrestling Entertainment (WWE) CEO Vince McMahon is no longer a billionaire after he lost an estimated $350 million in one day, per multiple reports.
WWE CEO Vince McMahon is no longer a billionaire.
Dan Alexander of Forbes Magazine reports on May 16 that McMahon has lost an estimated $350 million due to plummeting shares in WWE stocks:
"Vince McMahon lost $350 million as of market close on Friday, as shares in his WWE took a beating from investors. The stock was down more than 40 percent since the market open.
"In fact, the stock, which had closed just below $20 on Thursday, opened below $11. That immediately knocked the WWE boss out of the billionaire ranks, putting his net worth now at an estimated $750 million.
"The stock fell after news that WWE had signed a new television deal with NBCUniversal for less than some investors had hoped. Benchmark analyst Mike Hickey estimated WWE got a 50 percent raise over its last TV agreement, but he expected the new deal to pay WWE double or triple its previous one.
"'The company's valuation could take a heavy beating this morning, as the new domestic TV deal with NBCUniversal likely disappointed investors,' he wrote in a report downgrading the price target for the company's stock from $29.12 to $19.96.
"WWE executives kept an even tone but offered little additional guidance. 'We never commented publicly on the expectation,' said George Barrios, chief strategy and financial officer. 'We said we were undervalued by the math that we had done.'
CNN's Benjamin Snyder adds more about the development.
"Comcast Corp.'s NBC Universal (CMCSA) signed a multi-year deal to continue broadcasting WWE's 'Raw' on USA Network and 'Smackdown' on NBC's Syfy Network. The financial terms were not disclosed.
"Investors had anticipated a big bump from the $100 million in annual revenue WWE earned from the previous contract. But in the end, they concluded that the company negotiated with much smaller payoff.
"Furthermore, WWE issued a disappointing outlook that suggested uncertainty about its future business. Profits excluding certain charges will double or triple to $125 million to $190 million by 2015, the company said.
"Such a wide range of possible earnings outcomes based on different business scenarios spooked investors.
"Vince McMahon, WWE's chief executive, remained positive about the deal by pointing out that domestic and international television rights are for a combined $200 million, which is nearly double from the recent past.
"'The rising value of our content coupled with the global expansion of WWE Network will provide the foundation for long-term growth that continues to transform our business over the coming years,' he said in a statement.
"Meanwhile, Bonnie Hammer, NBCUniversal Cable chairman, said, 'USA Network president Chris McCumber, Syfy president Dave Howe and I are incredibly pleased to renew this strategic partnership with WWE.'"
"Vince said he hoped to giva 'a great deal of clarity' regarding where things are from a business standpoint. He noted that he was in London for Raw. He said the point of the call was to clear up any degree of misunderstanding and said they pride themselves in transparency.
"Vince said there was 'a somewhat favorable outcome' in television deals. He admitted they were a bit disappointed in their NBCU deal, but they were able to nearly double their overall television rights revenue. 'A good deal, not what we wanted,' Vince said regarding the NBCU deal.
"Vince said the core business is 'rock solid.' He said they feel very strong and bullish in the WWE Network business model."