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World Wrestling Entertainment Shares Plunged: What You Need to Know

By Travis Hoium - Updated Apr 6, 2017 at 10:06PM

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Is this meaningful? Or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of World Wrestling Entertainment (NYSE: WWE) fell 10% today after the company announced a revised dividend policy.

So what: When a dividend yield reaches 12.5% like WWE's did, we should expect that something has to change. The company's former $0.36 dividend will be cut to a more reasonable $0.12 to keep the company from running out of cash.

Now what: WWE's stock has been in a tailspin lately and the company has been returning more cash to shareholders than it is pulling in, so this is a prudent move in the long run. It may have investors disappointed today, but it's the right move for the company. I don't think this presents an opportunity to jump in yet, but if Vince McMahon can turn operations around, WWE could see a nice pop in the future.

Interested in more info on World Wrestling Entertainment? Add it to your watchlist.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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World Wrestling Entertainment, Inc. Stock Quote
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