Source: PWInsider.com
Below is an official press release that was issued this afternoon:
Lemelson Capital Announces Stake In World Wrestling Entertainment And Calls On Board To Pursue New Management Or Ownership
Marlborough, MA, May 16, 2014 -- Lemelson Capital, LLC, a
private investment management firm, today announced that they had taken a
stake in shares of World Wrestling Entertainment (WWE) and called on
the Board of Directors to replace the executive management team of the
company following a period of consistent losses, execution issues and
material misstatements.
Despite the stock's roughly 63% correction since Lemelson
Capital's original short call less than two months ago (from $30.37 on
March 17 to $11.33 as of publication of this release), the firm today
also reiterated that fair value of WWE's common stock is between $8.25
and $11.88.
Lemelson Capital's original short thesis can be found here:
"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 today also called on WWE's Board of
Directors to promptly replace the company's executive management team,
or explore the sale of the business, and said that such 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.
Lemelson Capital and its clients are long shares of WWE.
About Lemelson Capital Management
Lemelson Capital Management, LLC is a private investment
management firm focused on deep value and special situation investments.
For more information, see: http://www.lemelsoncapital.com
