INVESTING FANS, get a load of this! On May 16 a battle for the ages took place, and it was a BLOODBATH.
In one corner, you had the challenger: the WWE (WWE) . Coming in at an $847 million market cap, this plucky former POWERHOUSE came in looking for revenge. However, they are considerably WEAKER than they once were, and are fresh off last month’s HUMILIATING defeat that saw their stock GET OWNED BY THE BEARS.
In the other corner, you had the champion, the FREE MARKET. The GLOBAL BEHEMOTH that SPARES NO ONE, the Free Market has a centuries-long track record of EATING COMPANIES LIKE THE WWE FOR BREAKFAST.
The stage was set. May 16. The Free Market versus the WWE. WHO WOULD WIN?
The WWE made the first move, entering into a deal with NBC Universal to carry their shows. WOW!
The Free Market was NOT IMPRESSED. It stepped back and delivered a DEVASTATING COUNTER. They took the WWE’s deal and TURNED IT AGAINST THEM.
Turns out, the deal is NOT GOOD. While $150 million a year for rights to their shows is a lot of money, analysts were expecting at LEAST $180 million. That means the new deal will shave MILLIONS and MILLIONS off of the WWE’s futures revenues. Oh no!
The Free Market had the WWE in a headlock. Things looked DIRE. The WWE’s CEO and cheerleader, Vince McMahon, made a last ditch plea to the Market: spare our TINY COMPANY. He pled with the Market: the deal is actually good! Everything will be fine!
No dice! “RARRRRRR!” said the Free Market. “I have no patience for your LIES.” The Free Market took the WWE and HAD ITS WAY WITH THEM.
Boom! Pop! Pow! “Stop it! You’re hurting the WWE!” investors pleaded, but their lamentations fell on DEAF EARS. Shares PLUMMETED.
The WWE watched helplessly as its shares were treated like a RAGDOLL. The Market did not stop though, for the Market is unrelenting, like a SHARK THAT MUST FEED CONSTANTLY. And it hungered for MORE of WWE's VALUE! Before the trading day was over, shares were down 50 PERCENT. Oh, the humanity!
By 1:45 EST the WWE had recovered somewhat, but had still shed 43.40 PERCENT to hit $11.26 a share. For the May 16 trading action, it was clear who the victor was: the powerful, still-champion, FREE MARKET.