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What’s the story?
Vince McMahon sold $100 million of WWE stock to finance his newly created company, Alpha Entertainment - a company that also filed five trademarks to “XFL.”
In case you didn’t know..
News broke last week that McMahon was using his own funds to finance Alpha Entertainment. A WWE spokesperson issued a statement confirming Alpha Entertainment as a company with interest in professional football, which caused many to speculate on the return of the XFL, a professional American football league that was started in 2001 as a joint venture between WWE (then WWF) and NBC.
The heart of the matter
WWE stock was at a high of $32.27 USD earlier this morning, but fell to $31.87 by the end of the business day. The after-hours stock price dropped to $30.80 following a report by ESPN’s Darren Rovell which said McMahon had sold WWE stock to finance Alpha Entertainment.
The report also revealed that five trademarks were filed to “XFL” regarding the rights for distribution of professional football content, downloadable software, toys and sporting goods, apparel, and hundreds of other details.
WWE released the following report today informing stockholders that McMahon has no intention of selling any more stock and will continue as the company’s Chairman and CEO.
On December 21, 2017, Vincent K. McMahon (“Mr. McMahon”), Chairman and Chief Executive Officer of World Wrestling Entertainment, Inc. (the “Company”), sold 3,340,000 shares of the Company’s Class A common stock in a block trade made in accordance with the provisions of Rule 144 of the Securities Act of 1933, as amended. Mr. McMahon executed the sale primarily to fund a separate entity from the Company, Alpha Entertainment LLC, which Mr. McMahon established to explore investment opportunities across the sports and entertainment landscapes, including professional football. Mr. McMahon has informed the Company that he has no current plan to sell additional shares of the Company’s stock and that he intends to continue in his capacity as the Company’s Chairman and Chief Executive Officer for the foreseeable future.
The report also said that McMahon only sold 4.3 percent of the company’s total outstanding shares and showed that McMahon currently holds 82.8 percent of the company’s voting power after the sale.
What’s next?
McMahon is clearly committed to trying his hand at the XFL again and may be doing so with the intention of taking advantage of the NFL’s low ratings. The XFL only had one season, but season two may be on its way.
Author’s take
The planned return of the XFL has already affected WWE stock and could lead to further backlash on the stock market if the defunct league is revived.
