WWE shares were down as much as 42% Friday after the wrestling group announced its new online TV network won’t make up for lost pay-per-view and streaming video-on-demand business until 2015, Bloomberg reports.
It was the biggest drop since its IPO.
In a footnote in a company release, WWE said it could not guarantee when, “if at all,” it would be able to reach the level of streaming subscribers necessary to replace PPV viewers.
Here’s Bloomberg’s Rob Golum:
The WWE Network needs 1.3 million to 1.4 million subscribers to generate enough income to replace lost earnings from pay-per-view events, the Stamford, Connecticut-based producer of wrestling entertainment shows said yesterday in a statement. The WWE Network, which began operating on Feb. 24, finished the first quarter with almost 670,000 subscribers. The company said in April it was confident the WWE Network will reach 1 million subscribers this year, a goal Chief Financial Officer George Barrios reiterated in an interview.
Golum says there’s also been talk that CEO Vince McMahon may be looking to sell the company.
“The issue here is that investors do not have a good understanding on the path to profitability,” Paul Sweeney, a Bloomberg Industries analyst, told Golum.
Shares were trading at $US11.30.
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