NEW YORK--(BUSINESS WIRE)--Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in World Wrestling Entertainment, Inc. (“WWE” or the “Company”) (NYSE:WWE) of the May 5, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in WWE stock or options between February 7, 2019 and February 5, 2020 and would like to discuss your legal rights, click here: www.faruqilaw.com/WWE. There is no cost or obligation to you.
You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to email@example.com.
The lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of all those who purchased WWE securities between February 7, 2019 and February 5, 2020 (the “Class Period”). The case, City of Warren Police and Fire Retirement System v. World Wrestling Entertainment, Inc. et al, Docket No. 20-cv-02031 was filed on March 6, 2020, and has been assigned to Judge Jed S. Rakoff.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by failing to disclose that (1) WWE’s relationship with the Saudi government had continued to deteriorate; (2) that the Saudi government and its affiliates had failed to make millions of dollars in payments owed to WWE pursuant to existing contractual commitments between the parties, including at least $60 million owed in connection with the June 2019 Super ShowDown event; (3) that OSN had refused to restart the broadcast of WWE programming despite a contractual obligation to continue such broadcasts and that this refusal was symptomatic of a deterioration in the business relationship between the parties; (4) that OSN had rebuffed efforts to renew a distribution rights agreement on terms acceptable to WWE and such renewal was unlikely to occur in 2019, if ever; (5) that WWE did not have the ability to expand its operations in the Middle East or within Saudi Arabia as had been represented to investors; and (6) that, as a result of the foregoing, defendants’ positive statements about the Company’s business metrics and financial prospects during the Class Period were materially false and misleading and/or lacked a reasonable basis.
Specifically, on October 31, 2019, WWE issued a press release providing the Company’s third quarter 2019 (“3Q19”) financial results. The press release stated that the Company’s revenues and operating income had continued to decline year over year to $186.3 million and $6.4 million, respectively. The Company also announced that it was lowering its FY19 adjusted OIBDA guidance to a range of $180 million to $190 million due in large part to WWE’s failure to complete a MENA distribution agreement with the Saudis. On a conference call to discuss the results, defendant Barrios stated that “no assurances” could be given that the deal would ever be completed.
That same day, WWE held the Crown Jewel live event in Riyadh, Saudi Arabia. After the event ended, shocking news reports surfaced claiming that the Saudi government was effectively holding a number of WWE wrestlers “hostage” in retaliation for defendant McMahon’s decision to delay a live broadcast of Crown Jewel until the Saudis made tens of millions of dollars in past due payments. Estimates for the amount outstanding ranged from $60 million to as much as $500 million. Several wrestlers detailed their experience during the ordeal on social media platforms.
Reports based on discussions with Company insiders claimed that this blowup was just the latest iteration of a long-standing Saudi pattern and practice of failing to make necessary payments. For example, professional wrestling journalist Brad Shepard stated that he had spoken to a source within WWE who had stated “that every show [the Saudis] come up short on money owed by about a couple of million, and they provide the excuse of it being a ‘departmental issue’ and they promise to send the money within a short time frame later – but never do.” He continued: “So, there’s a belief within WWE that they are either getting screwed on the deal with Saudi Arabia or something else is going on – which I won’t speculate. I once again asked if women’s wrestling had anything to do with this and was once again told yes, partly.”
On this news, the Company's stock price fell from $66.44 per share on October 30, 2019 to $56.04 per share on October 31, 2019: a $10.60 or 15.65% drop.
Then, on January 30, 2020, WWE announced that two of its most senior and longest serving executives, defendants Barrios and Wilson, had abruptly left the Company. Analysts and market commentators reacted with shock at the sudden loss of two key figures who had long been part of the public face of the Company. For example, Forbes described the departures as a “bloodbath” that had caused “[p]anic and uncertainty” throughout WWE’s corporate offices.
On this news, the Company's stock price fell from $62.30 per share on January 30, 2020 to $48.88 per share on January 31, 2020: a $13.42 or 21.54% drop.
Finally, just a few days later, on February 6, 2020, WWE again announced disappointing financial results and guidance. The earnings release issued by the Company revealed that consumer engagement metrics had continued to deteriorate in the fourth quarter, and that the Company had achieved just $180 million in adjusted OIBDA for the year due to the failure to complete the MENA distribution agreement with the Saudis. On an earnings call to discuss the results, WWE’s CFO, Frank Riddick, confirmed that the Company’s 2020 financial guidance did not include any revenues related to a prospective MENA deal.
On this news, the Company's stock price fell from $49.00 per share on February 5, 2020 to $44.50 per share on February 6, 2020: a $4.50 or 9.18% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding WWE’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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