Tomahawk, WI 03/17/2014 (Basicsmedia) – Vince McMohan, the Chairman of World Wrestling Entertainment, Inc. (NYSE:WWE) recently became a billionaire on the back of rising stock prices. But he is probably one of the most recognizable names in the world whether he’s a billionaire or not. The WWE stock has doubled in just the last three months and has seen a 35% increase this month itself. The stock surge has been fueled by takeover speculations which have been denied by the company.

Robust Business

A company built around staged fights may not appear to be a billion-dollar idea at first but Mr. McMohan’s brain-child is one of those rare creations with a brand that is recognized almost all over the world. World Wrestling Entertainment, Inc. (NYSE:WWE) has fans not only in the U.S., but in the U.K., Canada, Australia, New Zealand, Singapore, Hong Kong, Japan (WWE Live will return to Japan in July 2014), Thailand, Germany (a new multi-year TV deal announced last week), India, and so on.

With the launch of the spanking new WWE Network, the company expects huge revenue growth in 2014 and 2015. With two to three million subscribers each paying $9.99 per month to view all the premium offerings such as Wrestlemania, World Wrestling Entertainment, Inc. (NYSE:WWE) expects a steady revenue stream which will add about $50 to $150 million to its bottom-line. If the company is able to get even two million subscribers who are willing to pay $120 per annum, that translates to a whopping $240 million which is almost thrice the company’s present annual pay-per-view income of $82 million. What remains to be seen is whether the company is able to get those two million subscribers in this sort of a weak economy.

Also, the WWE Network will be incrementally rolled out in international markets by the end of 2014 and or early 2015 generating more revenue.

Stock May Be Overpriced

Though World Wrestling Entertainment, Inc. (NYSE:WWE)’s has good growth prospects, the stock was trading at around $10 as recently as six months ago. Their 4Q2013 results were mixed — declines in both operating and net income and slight increases in some others such as pay-per-view business and international revenue. So, at the present level of $30, there does not appear to be too much scope for the price of the stock to rise.

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