The City Of Warren Police And Retirement System, a retirement fund, has filed a lawsuit against WWE for making “materially false and misleading statements regarding the company during the class period.” A reminder has been issued to fellow investors who’s losses exceed $100,000 to potentially serve as lead plaintiff.
The exact details of the lawsuit are contained HERE but we will be attempting to summarise the main points of the suit. The previously mentioned “class period” is February 7, 2019 to February 5, 2020 inclusive which means that anyone who purchased shares between these two dates is eligible for this lawsuit.
The main complaint of the plaintiffs is that the WWE did not disclose relevant information to investors regarding their dealings in Saudi Arabia. The argument is that investors were unaware of “simmering tensions” between WWE and Saudi Arabia and that the Saudis refused to “…make millions of dollars in payments owed to WWE.” As well as this WWE claiming to be close to agreeing on an important media rights deal in MENA (Middle East and North Africa). These tensions and failed payments threatened WWE’s ability to meet its projections but were not disclosed to investors.
As many people are aware the WWE’s stock price plunged following their recent financial disclosures due to the ousting of George Barrios and Michelle Wilson as well as performance falling short of expectations, with the failure to secure the MENA broadcasting deal with the Saudis playing it’s part in this. This has lead to the accusation that WWE employees with this “inside knowledge” i.e the Saudi deal going awry, were able to sell off shares leaving outside investors to suffer “…hundreds of millions of dollars in losses…”
It’s unlikely that the plaintiffs will win this lawsuit as it would be tough to prove that the WWE knew the Saudi Arabia deal was going awry or that they would fail to get a broadcasting deal. It would also be tough to prove that there was any insider trading. Despite that, this is another blow to WWE whose stock price has failed to recover in the month since plunging.
