Another Lawsuit Filed Against WWE Regarding Stock Value Issues
A new class-action lawsuit was recently filed against WWE in regards to allegations of fraud involving the company’s decline in stock value in recent months.
A law firm named Pomerantz LLP filed the class-action lawsuit on behalf of WWE’s shareholders alleging that securities fraud or unlawful business practices were committed by several WWE executives in recent months, which led to the company’s drop in stock value and disappointing quarterly fiscal reports.
Portion of official press release:
NEW YORK, March 25, 2020 (GLOBE NEWSWIRE) — Pomerantz LLP is investigating claims on behalf of investors of World Wrestling Entertainment, Inc. (“WWE” or the “Company”) (WWE). Such investors are advised to contact Robert S. Willoughby at rswilloughby @pomlaw.com or 888-476-6529, ext. 9980.
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 …
Allegations against WWE include that: Defendants perpetrated a fraudulent scheme which: (i) deceived the investing public regarding WWE’s business and prospects; (ii) artificially inflated the price of WWE Class A common stock; (iii) permitted certain senior executives of WWE to sell more than $282 million worth of their personally held shares at fraud inflated prices; and (iv) caused the public to purchase WWE Class A common stock at artificially inflated prices.
WrestleMania 36’s Main Events Were Undecided as of Earlier This Week
WWE reportedly was still undecided on the main event matches for both nights of WrestleMania 36 as of earlier this week, according to Fightful.
Due to this year’s WrestleMania being a two-night event, WWE was in a position of having to pick two main event matches instead of one which lead to more internal discussions over the past week.
Fightful also reported that at one point, Shayna Baszler vs. Becky Lynch for the RAW Women’s Championship had been penciled in as the main event for Night One but recently there has been a strong push for Roman Reigns vs. Goldberg for the Universal Championship to have that spot instead.
WWE Files Several New Trademarks
WWE filed several new trademarks to the United States Patent and Trademark Office.
Trademarks for “Too Big For One Night” and “I Wasn’t There” were filed on March 20th for merchandise-related purposes. A separate trademark for “Too Big For One Night” was also filed on March 20th for wrestling-related purposes.