Vince McMahon's Investigation Has Already Reportedly Cost WWE Hundreds of Millions of Dollars in Value
Vince McMahon's ongoing scandal has already cost WWE approximately half a billion dollars, according to the Wrestling Observer's Dave Meltzer. The Wall Street Journal released a report back on June 15 stating the WWE Board of Directors was investigating McMahon over allegedly paying $3 million to a former employee as part of a hush pact to keep their affair quiet. Both McMahon and WWE Head of Talent Relations John Laurinaitis, who was also implicated in the report, have since temporarily stepped away from their front office positions with Stephanie McMahon stepping in as interim CEO and Chairwoman.
There haven't been any additional details about the report released as of yet and McMahon has opted to appear on both SmackDown and Raw over the past week while continuing to operate as WWE's head booker. And while those appearances managed to pop ratings, the company's stock has taken a noticeable hit by dropping from $66 per share last Thursday to $59 as of this writing). Five law firms are now investigating the company for potential lawsuits on the behalf of investors as well.
"It's imperative of WWE to try and get the stock price up, and make sure it gets back to its former level," Meltzer said. "Since the story broke...WWE's lost about half a billion dollars in its valuation. Because of that, there have been five firms, and there's probably gonna be more that come out because this is a copycat type of a situation, that are trying to get especially institutional investors in WWE stock as clients for class-action lawsuit that would blame what happened with Vince on the stock price drop."
"WWE stock decreased a lot ever since this thing went down, and because of that...there's some similarities between this and the Saudi Arabia thing, which if you remember, there were about 20 different firms that filed suit there, and it cost WWE 39 million dollars to settle that one," he continued. "This one, WWE would almost have to settle, because what would happen if the suit gets filed...Vince would have to be deposed because it's gonna be all about what Vince did...that would be the crux of the suit. Which means that if they went to discovery, Vince would have to be under oath and he'd have to answer these questions relating to exactly what he's been trying to already pay people off to keep quiet. What they're looking for would be the settlement. So if the stock price got back to its old value, there's nothing that the stockholders can sue over, because it didn't cause the stock price to drop. But because the stock price has dropped, if it doesn't get back up, whatever the difference is, they can claim that is due to the publicity of what happened to Vince has hurt the stock...so that's the key thing."