WWE Loses More Than $1B In Market Cap With Stock Drop, Analysts Speculate On Shake-Up, Dividend

WWE's Board of Directors declared the company's quarterly dividend on Thursday of this week.

This happened to be announced on the same day that WWE announced the "management transition" with Co-Presidents George Barrios and Michelle Wilson leaving WWE, and no longer being on the Board. You can click here to read the latest on the major corporate shake-up with Barrios and Wilson leaving, and you can see WWE's press release on the quarterly dividend below:

WWE® Declares Quarterly Dividend

STAMFORD, Conn.–(BUSINESS WIRE)– WWE (NYSE: WWE) announced that its Board of Directors today declared the Company's regular quarterly dividend of $0.12 per share for all Class A and B shares of common stock. The record date for the dividend will be March 13, 2020 and the payment date will be March 25, 2020.

As noted, WWE stock was down 21.57% on Friday, closing at $48.88 per share. The high for Friday was $51.33 and the low was $45.10. Company stock tanked in after-hours trading on Thursday after the Wilson and Barrios departures were announced. Stock is trading down 0.29% at $48.74 in after-market trading now.

The sudden drop in WWE stock has been picked up by several mainstream media outlets, including CNN, The New York Post, NBC, Yahoo, and local media outlets in Stamford, CT where WWE HQ is located.

Bloomberg noted that more than $1 billion in market value was lost with the stock drop on Friday. This drop was WWE's biggest decline in almost 6 years, sending the shares to their lowest levels since May 2018.

The shake-up brought multiple downgrades on Wall Street as multiple analysts said they have lost confidence in WWE's financial projections.

CNN Business noted that analysts at Morgan Stanley, Loop Capital and Evercore ISI all lowered their price targets and ratings on WWE stock on Friday, due to the corporate shake-up. It was noted that WWE officials need to figure out a plan to get fans excited again as we approach WrestleMania 36, or the stock price may "remain pinned to the mat" for the company.

"Television ratings have crumbled, while engagement metrics across the company's other business units have followed linear TV ratings down. Fans have continuously complained about the quality of the company's content," wrote LightShed Partners analyst Brandon Ross on Friday. He continued, "Content needs to improve at WWE if the company is going to be investable, and no matter who comes in to take the place of the former presidents, the burden of improving the content sits squarely on Vince, who has held tight control over the creative at WWE for decades."

Alan Gould of Loop went from hold to buy on WWE stock and said he has "diminished confidence" in his estimates due to the sudden change. Gould's current target price on the stock is $50, down from $80. He speculated that Vince "was not pleased with the results of the international TV deals" and "wanted to reinvest more of the growing cash flow back into the business."

Citigroup analyst Jason Bazinet said he believes Barrios and Wilson "may have wanted to gradually reinvest incremental US media rights revenues, while Mr. McMahon may want to make more aggressive investments."

Eric Handler of MKM Partners said he was more optimistic, noting that "a change in the C-Suite does ont necessarily mean more bad news is coming. He currently has WWE stock on buy and a target price of $92. He added, "Given the known step-up in the domestic TV rights deal, we do not believe the company is in a 'precarious' financial position."

Barron's noted that WWE now expects to report adjusted full-year 2019 earnings of $180 million, which would be at the low end of previous expectations. We've noted that the timing of this week's announcement was interesting as the company will report their 4th quarter and full-year 2019 earnings next Thursday. Barrios and Wilson have played major roles in the investor calls for years now. As usual, we will have full coverage of next Thursday's release and the investors call. There's no word yet on who will host the call with Vince.