Forbes: WWE stock overpriced?

Stock in WWE has tripled in the past six months on the strength of the walkup and first few weeks of sales for the new WWE Network with projections of 1 million subscribers in the first year and a ceiling of 2-3 million in the future, and negotiations on a new TV deal that could add $200 million to $300 million annually to the company’s bottom line.

Coulda, woulda, shoulda. In the here and now, an article in Forbes points out, revenues at WWE have been stagnant since 2008, at around $500 million. That tidbit in the article could be a factor in a selling frenzy involving WWE stock, which dropped 7.34 percent today after the article appeared online.

Another key: the article quotes a portfolio manager at Intrepid Capital Management, which was WWE’s largest outside shareholder until January, when it sold its 10 percent stake, believing that WWE Network will be a tougher sell than WWE insiders believe. The network “is a slam dunk for a die-hard fan,” said Jayme Wiggins, a portfolio manager at Intrepid. Wiggins estimates the reach for WWE Network at 700,000 subscribers, “but I don’t think it’s going to be easy for them to get another 500,000.”

There are also concerns about the succession plan upon the inevitable retirement of CEO Vince McMahon, clearly the driving force of the company both from business and creative standpoints.