Economic Bodyslam: Stock prices, is the WWE recession proof?, and more
Submitted by Mr. Tito on Friday, December 21, 2007 at 8:41 PM EST





WWE stock history through December 21st, 2007:

12/17/07: $13.95
12/18/07: $14.74
12/19/07: $14.72
12/20/07: $14.60
12/21/07: $14.69

52 Week High: $18.60
52 Week Low: $13.49

IMPLICATIONS: The WWE stock, again, was a victim of circumstances with a fluctuating market to start the week. The Federal Reserve auctioned funds to banks throughout the week and the market, with this as a new practice, saw uncertainty of future Fed policy. Additionally, investors are buying into the media hype of the dreaded "R-word" that may be looming (though strong consumer spending released today may speak to the contrary). The WWE stock received a nice positive boost by a new market analyst being added and they initiated their analysis with a "buy" status. Provided that the WWE stock is paying a decent dividend and for the fact that it's at the lower end of the 52 week low, this makes sense. Plus, the WWE financial statements have shown profitability of the company. The WWE has utilized new money through internet, DVD, and WWE 24/7 stuff while cutting costs on the back end. Investors appeared to dislike, however, the dismissal of a lawsuit that the WWE filed against Jakks Pacific over merchandising licensing issues.

Reading into financial analyst comments, it should be known that the WWE could have had a better 3rd quarter had the losses suffered from the "Condemned" film not been figured in. While the WWE has been boosted by other new revenue streams, this is a sector that appears to need work and movie failures appear to be loud news in the media that any investor could easily hear.

The stock appears to be afloat around $14 and above and could trend upward heading into the WWE's most successful portion of the year.

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QUESTION: Is the WWE and its stock "recession" proof?

First thing is first... A recession has to occur first. Today's strong consumer spending report is in spite of high rates of inflation seen in November and ongoing housing/credit problems. For a recession to occur, personal consumer expenditures, which comprises 70% of Real Gross Domestic Product, has to tank.

But, if a recession were to occur in 2008, the effect on pro wrestling is really minimal. WWE was profitable during 1990 and the years after during 1991 and 1992. I'd argue that the WWE wasn't as popular as the 1980's, however, due to non-economic issues. Pro wrestling has shown to be generational and Hulkamaniacs appeared to grow up after 1989. Hulk Hogan's drawing power diminished and the WWE could not effectively create stars from 1990 to 1996 that drew like Hulk Hogan.

Secondly, the recession of 2001 and the added clamps of 9/11. The WWE did just fine, financially, during 2001-2003... Granted, again, the product could be argued to be weaker and it didn't do the business of the late 1990's or the huge 2000 year, but the WWE faced no competition and were still able to spend millions buying big name WCW stars that did not pan out. Someone spending millions on Kevin Nash, Scott Steiner, Scott Hall, and Bill Goldberg does NOT show signs of being hard-hit by recessionary conditions.

Fans like their entertainment... sports leagues have no problems weathering through recessions. If anything, things like pro wrestling and pro sports help individuals cope with harsh economic conditions. Plus, cable television has virtually become a necessity to most Americans.

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WWE WIRE

- WWE Dominates Leading Internet Search Engines in 2007 - This article analyzes how popular "WWE" is as a search engine term. WWE was #1 on AOL's search engine for sports terms. Just to show you the WWE's popularity on the web, "WWE" was ranked #2 behind Britney Spears on Yahoo!. Seriously, with the shaved head, horrible parenting, divorce, up-shirt shots, etc., the WWE should be certainly accepting of #2 behind Ms. Spears. Additionally, this report talks about monthly hits on WWE.com being around 18,000,000 compared to 16,000,000 per month in 2006.

- WWE has been touting not being part of recent toy recalls. Who can blame them? Merchandising is a major part of their revenue stream and the recent lead paint problems with certain toys presents a serious reputational hits with consumers during Christmas shopping time. Fisher Price, for example, has issued commercials to ensure that their toys have not fell victim to the recent lead paint problems with toys made overseas.

- Several press releases about John Bradshaw Layfield (JBL) teaming up with a company for energy drink marketing out there. Interesting thing with JBL, he's been working on the FOX News financial shows on Neil Cavuto's Saturday morning show. He's not bad... he appears to be bullish on the market and pro-Republican on his political views. If I'm not mistaken, this show is on at 10:30 am on FOX News.

Just chill... till the next episode: wrathoftito@yahoo.com.









*NEW GALLERY* New AMAZING Candid Photos of Karen Angle on BLTS! WOW!

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