Vince McMahon is no longer a billionaire.
Forbes reports that the World Wrestling Entertainment chairman and
CEO lost a whopping $350 million when the company's stock crashed
today upon news that its new streaming online video network would not
replace its pay-per-view revenues until 2015.
McMahon's wealth was previously estimated at around $1.1 billion,
meaning he lost more than 30% of his fortune in today's crash, which
sent the stock plummeting from $19.93 a share to $11.27.
The crash, WWE's largest drop since its 1999 IPO, was precipitated by
news that the company's new television deal with NBCUniversal was not
as lucrative as investors had expected.
According to Forbes, investors were expecting the new deal to be worth
between two and three times as much as the previous one, when in fact
the contract's value is expected to be a mere 50% increase.
Additionally, the company said in a statement yesterday that it will need
1.3 million to 1.4 million subscribers to its over-the-top service to
replace revenues it is losing from its monthly pay-per-view events, which
previously cost around $50 but are now available to WWE Network
subscribers as part of their $9.99 monthly fee.
Currently, the WWE
Network only has 670,000 subscribers.
Excitement about the network and the new TV contract caused the stock
price to double during the first three months of 2014, closing at a record
high of $31.39 on March 20.
The price increase helped McMahon
become a billionaire for the first time since 2000.
Alas, it appears that distinction was to be short-lived.
Business Insider
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