You've gotta love World Wrestling Entertainment
And now comes word regarding preliminary results for fiscal 2004. WWE believes its revenues will be essentially flat versus the prior year, coming in around $370 million to $375 million. Net income paints a much prettier picture: WWE sees earnings per diluted share of $0.64 to $0.70. For 2003, the firm produced a loss of $0.28 a diluted share.
From what I've read, WWE is a media company that wrestles with the image it has in the minds of institutional investors. (Yes, groan all you want, but that is my finishing move: the pun!) Seems silly that smart people can't separate the wild, fictional entertainment in the ring from the excellent economic prospects of the underlying content generator.
It's like saying you can't take Disney
WWE is doing well and seems to be in a much better cycle these days. It is running more efficiently and does a good job of tailoring products for its young-male demographic. One vital item to note: A trust designed for Vince McMahon and members of his family will be selling several million shares of WWE. While it can be troubling to see shares being sold by the top dog, even if it is for a theoretically benign reason such as estate planning, I'm not going to worry about it too much (for now, anyway).
WWE stock has shown good strength over the last year, outperforming the S&P 500. It has suffered lately, however, and I would imagine that, in addition to the cataclysmic market conditions as of late, investors are taking notice of this recent shelf registration.
Nevertheless, it's one of Seth Jayson's sloth stocks, and I'm too lazy to argue against that.
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Fool contributor Steven Mallas owns shares of Disney.