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WWE’s value is down ‘half a billion dollars’ following Vince McMahon’s hush money allegations, and it might get worse

WWE.com

WWE television ratings are booming in the aftermath of last week’s Wall Street Journal reporting on hush money allegations made against Vince McMahon, but this scandal is most certainly not best for business.

WWE is a publicly traded company, and their stock price has significantly fallen since the story broke. This has led to a situation where legal sharks are circling WWE, looking into potential class action lawsuits with big money on the line.

On Wrestling Observer Radio, Dave Meltzer explained why it’s important for WWE to get the stock price back up:

“It’s imperative of WWE to try and get the stock price up, and make sure it gets back to its former level.”

“Since the story broke...WWE’s lost about half a billion dollars in its valuation. Because of that, there have been five firms, and there’s probably gonna be more that come out because this is a copycat type of a situation, that are trying to get especially institutional investors in WWE stock as clients for class action lawsuit that would blame what happened with Vince on the stock price drop.”

“WWE stock decreased a lot ever since this thing went down, and because of that...there’s some similarities between this and the Saudi Arabia thing, which if you remember, there were about 20 different firms that filed suit there, and it cost WWE 39 million dollars to settle that one.”

“This one, WWE would almost have to settle, because what would happen if the suit gets filed...Vince would have to be deposed because it’s gonna be all about what Vince did...that would be the crux of the suit. Which means that if they went to discovery, Vince would have to be under oath and he’d have to answer these questions relating to exactly what he’s been trying to already pay people off to keep quiet.”

“What they’re looking for would be the settlement. So if the stock price got back to its old value, there’s nothing that the stockholders can sue over, because it didn’t cause the stock price to drop. But because the stock price has dropped, if it doesn’t get back up, whatever the difference is, they can claim that is due to the publicity of what happened to Vince has hurt the stock...so that’s the key thing.”

Meltzer’s description of WWE’s legal situation and comparison to the costly Saudi Arabia settlements certainly doesn’t sound promising for the company. The stock price was north of $68 per share before the story broke on McMahon’s hush money allegations, and it’s dipped below $60 per share this morning.

What’s your take on this situation, Cagesiders?