WWE stock rose Monday after news broke that WWE was revising its financial statements to account for $14.6 million in payments that should have been written off as expenses. That could include the alleged $12.5 million in secret payments to former female employees alleging harassment, misconduct and abuse that was recently reported by the Wall Street Journal.
Shares of WWE rose as much as 10.57% on the back of a seemingly stable stock market, before trading up 7.90% at press time. By comparison, the S&P rose just .2%, while the Dow didn’t fare much better at +.3% and the Nasdaq was down .27%, suggesting that Wall Street was reacting to more than just Friday’s news that Vince McMahon has retired and Nick Khan & Stephanie McMahon are now co-CEOs, but also today’s news that Paul Levesque (fka Triple H) has taken control of the creative direction of WWE going forward. WWE stock is currently trading around $71, a figure the stock hasn’t seen since the latter half of 2019.
While Triple H taking the creative reins of WWE could be a major boon to programming, it seems his promotion, as well as the reaction on Wall Street, is more confirmation of the corporate reality that Vince McMahon is unlikely to return to WWE , leaving the company’s future uncertain. While McMahon’s daughter Stephanie technically maintains the family arm of the business, Nick Kahn’s move to co-CEO is a huge shake-up. Khan confirmed earlier this year that he had received calls about a potential sale, but that the company was not actively looking to be sold. “We want to be in business with anyone who is a real player in this business,” Khan told Sports Business Journal.
McMahon’s attorney, Jerry McDevitt, initially said that “WWE did not pay any money” to the employee who was the subject of the first WSJ report, leading to speculation that McMahon used personal funds in an attempt to hush up the allegations against him and then-EVP of Talent Relations John Laurinatis. According to Brandon Thurston of Wrestlenomics, WWE media relations stated that even if McMahon used personal funds to make the payments, the payments still benefited WWE and the financial statements would have to be audited as such. WWE’s current goal is to have up-to-date financial statements by Aug. 9, when it is due to report its second-quarter earnings and will report revised financial statements for 2019, 2020, 2021 and 2022.
According to today’s 8-K filing from WWE, the investigation into McMahon’s board of directors is still ongoing and that there may still be incoming “regulatory, investigative and law enforcement inquiries, subpoenas or requests.” The target date has many options traders betting on WWE stock. Currently, a number of options traders have pegged August 19 as the date by which WWE stock will rise or fall, with many puts and calls being made on that date – a ‘put’ being a bet that the share price will fall, while a ‘call ‘ is a bet that the price of a stock will rise.
The stock’s rally means that since his own retirement, the market value of McMahon’s current WWE shares has increased by approximately $150 million.
Shares of $WWE have held steady around $71 since midday, meaning Vince McMahon’s 28.7 million shares have gained about $150.5 million in market value since Friday’s close, when the stock was at $66.22 exactly before his departure was announced. https://t.co/fQZu7l0eyb
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