Will The 'WrestleMania Short' Trade Work Again This Year?

With WrestleMania 33 upon us, World Wrestling Entertainment, Inc. WWE shares may be perfectly positioned for a post-event short trade. Once again this year, WWE plans to host a post-WrestleMania conference call on Monday to update shareholders on WWE Network subscriber numbers.

Last week, reports surfaced that company management was hoping to reach 2 million network subscribers by WrestleMania. That goal represents an ambitious 40 percent jump from the company’s last reported subscriber count of only 1.40 million.

Since the launch of the WWE Network in 2014, traders have been disappointed with WWE’s post-WrestleMania updates. WWE stock has sold off by more than 2.1 percent during the post-WrestleMania week all three years, averaging a dismal 6.5 percent one-week loss.

This year, WWE stock may be particularly ripe for a selloff if the company doesn’t deliver an impressive subscriber count. In the past three months, WWE shares have climbed 21.4 percent, and traders could be quick to take profits.

Earlier this week, Citigroup estimated the network would need to reach 1.76 million subscribers to fully replace revenue lost by switching from a pay-per-view model. WWE has reportedly sent out email offers in recent weeks for three months of access to new networks subscribers for only $9.99 and three months of free network access for lapsed subscribers who reactivate their subscriptions prior to WrestleMania.

Update: On conference call Monday afternoon, WWE said it reached a new record of 1.95 million subscribers. The network averaged 1.49 million paid subscribers in Q1. The stock initially sold off about 6 percent and closed the day down 1.6 percent at $21.85.