Vince McMahon has taken his lumps over recent months, but nothing compares to the current Corvid-19 virus threat. For a couple of weeks now, WWE programming has consisted of empty arenas as they’ve shot Smackdown, Raw, NXT, and now WrestleMania 36 at the WWE Performance Center.
They’ve tried to keep the show going while other live sporting events have shut down, and many of us are grateful to have that entertainment, but at what cost?
It comes down to money
There was a report a couple of weeks back where it was claimed the WWE had half a billion dollars in liquid assets to keep the shows going. If that’s true, then there’s a chance they’ll be able to weather the storm. But nothing lasts forever, and it appears Vince McMahon is preparing for just that.
As reported in Yahoo Finance, McMahon is selling a portion of his shares (2.26 million, reportedly) in WWE through Morgan Stanley for $38 each. That’s a 2.66% discount on Tuesday’s closing price.
WWE shares have suffered a 40% decline in 2020, and this could trigger more sales and cause their stock price to drop even more. According to Yahoo Finance, McMahon could settle the deal by receiving cash and keep ownership of the shares.
Possible reasons for doing this
As mentioned above, the WWE has plenty of liquid assets to keep the shows running and pay their talent, but it’s not an infinite economic stream as many are currently out of work and unable to purchase merchandise.
This could be an attempt my McMahon to acquire more liquidity to help sustain the WWE. He’s done similar things before. He sold some of his shares a couple of years ago to pay for the XFL restart, and businesses generally put most of their profit back into the company, but this could be something more.
Many may see this as McMahon trying to cash in while knowing his company is going to fail.
While this is always a possibility, there’s no way he’d cash in and allow his family’s legacy to go under without a fight. It’s not his style, and while he may set up a safety net for himself and his family, he’s not going to bail.
There’s also the potential that the unnamed back mentioned in the Yahoo article may be calling for payment on their line of credit. Banks are notoriously fearful of recessions and for good reason. Having loans floating out there during a time like this, especially for a company that’s been struggling and losing money for a few months, is just a bad business decision.
Perception is a bigger danger
While McMahon fights to keep his company going, the perception among investors and fans will be what makes or breaks them. The old saying that perception is reality is very true, and he needs to convince other investors and fans that the WWE is stable. The best way to do this is to be transparent instead of his normal secretive ways.
If everyone sees what he’s doing and not just speculating, it could give him and the WWE the boost and breath of fresh air it needs to get through this.
Of course, McMahon knows best how to run his business. He’s pulled miracles out before, so this could be viewed as another challenge to overcome. If anyone can do it, it’s him.
As much as we may bemoan his decisions and practices, we can’t deny he’s proven himself time after time, so he does deserve the benefit of the doubt with this.
But like anything else, we need to wait and see how it plays out. Let’s keep our fingers crossed.
What do you think will happen? Let us know in the comments below.
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