Lemelson Capital has announced that they bought a stake in WWE at the new low price and is calling the Board of Directors to replace the executive management team of the company following losses and misstatements.
“WWE has affirmed that even with one million subscribers for its WWE network, the company stands to lose between $45 million and $52 million in FY 2014, which validates the original short thesis,” said Emmanuel Lemelson, Chief Investment Officer of Lemelson Capital Management.
“This follows what we believe to be material misrepresentations by the company about both the performance and operating profit model of its WWE network, which the company has wrongly labeled ‘a homerun’,” said Lemelson.
Lemelson Capital is also pushing to explore the option of the sale of the business and said that changes are a necessary component of any successful strategy going forward.
“For example, promoting the WWE direct network’s value to shareholders without a fair and accurate discussion of the implications to a traditional network revenue circumvented management’s fiduciary responsibility as stewards of investor’s capital, and is part of what has emerged as a pattern over recent years. Further, there are no pending operational developments in the pipeline to offset these significant losses,” Lemelson added.