Vince McMahon’s WWE, looking to reverse a six-day, 28 percent stock slide, said Tuesday that a record 1 million US households watched its pay-per-view “WrestleMania 30” extravaganza earlier this month.
Wall Street had gone soft on the Stamford, Conn., company last week after the WWE reported on April 7 that 667,287 people had signed up for its $10-a-month streaming network.
Investors were hoping for a higher number — an article in Barron’s put the expectations at 800,000 — and immediately put WWE shares in a stranglehold, pushing them down to $19.99 on Monday from $28.02 the day before the streaming announcement.
For Chairman and CEO McMahon, the stock drop added financial injury to WWE’s reputational insult, as he dropped from the ranks of billionaires.
The value of his 39.2 million WWE shares fell to $785 million from $1.1 billion in just six trading days.
Not one to back down from a fight, McMahon and his WWE on Tuesday quickly updated investors on the company’s streaming/PPV stats, disclosing the pumped-up 1 million US number.
Last year, WWE drew 1.1 million subscribers globally.
Investors reacted like teenagers at a “SmackDown” TV show taping, pushing WWE shares up 3.8 percent to $20.75.
The shares gained an added 4.8 percent in after-hours trading.
The WWE shares’ spike came despite rumors in WWE fan blogs that DirecTV would no longer offer the company’s PPV programming. DirecTV confirmed that it is dropping the WWE pay-per-views starting with the next event on May 4.
The satellite company and its rival Dish have both voiced concerns about WWE’s streaming network, which would cut them and cable companies out of the equation.
WWE derives around 16 percent of its $508 million in revenue, or roughly $81 million, from its 12 annual PPV events.
Of course, 1 million subscribers each paying $120 a year for the WWE streaming network would mean about $120 million in revenue.
Meanwhile, the WWE is in talks with broadcast networks about a deal for a future home for its “Raw” and “SmackDown” series.
McMahon is expected to announce new TV partners in the coming weeks after failing to come to an agreement with current partner NBCUniversal.
The company said it is on track to hit 1 million subscribers for its streaming network by Dec. 31.
(The 1 million total for “WrestleMania 30” was for streaming and direct PPV purchases.)
The WWE’s PPV numbers released Tuesday are a positive sign for the entertainment juggernaut, Needham & Co. analyst Laura Martin wrote in a report.
Martin likened the WWE’s streaming network to the power of Netflix — only McMahon had an advantage in that his company owned its content.
She has a $30 price target on WWE shares.