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.
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