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 stock were down 14.6% as of 2:20 p.m. Monday after the company reaffirmed its full-year business outlook despite a strong Wrestlemania event this past weekend.
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So what: Specifically, World Wrestling Entertainment announced its year-old WWE Network impressively surpassed 1.3 million subscribers following WrestleMania 31 on Sunday. That's a 97% increase from April 7, 2014 -- the day after Wrestlemania last year -- and a 31% increase from Jan. 27, 2015, when the network first exceeded 1 million subscribers. In addition, WWE noted its most recent growth was driven by 201,000 trial subscribers from a free promotion in February, of which 77% converted to paying subscribers in March.
Now what:As a result, WWE expects its current-quarter operating income before depreciation and amortization (OIBDA) to exceed the high end of its previous guidance of $3 million to $8 million. However, the company also maintained its previous full-year 2015 outlook, which indicates cautiousness regarding WWE's growth following its current quarter.
WWE Chief Strategy and Financial Officer George Barrios explained in a press release that though they are "pleased" with their short-term results, they're unsure how future growth might unfold:
Nonetheless, with shares of WWE still up 14% so far this year even after today's drop, it's hard to blame the market for taking some of those short-term profits off the table given that uncertainty.
The article Why World Wrestling Entertainment, Inc. Stock Plunged Today originally appeared on Fool.com.
Steve Symington has no position in any stocks mentioned, but he appreciates a good powerbomb every now and then. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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