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Hedge Fund Manager Questions WWE's Partnership With DraftKings

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Hedge Fund Manager Questions WWE's Partnership With DraftKings
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World Wrestling Entertainment, Inc. (NYSE: WWE) on Wednesday announced it entered into a new partnership with DraftKings Inc., a leading destination for daily fantasy sports.

Fans will compete in the "Ultimate SummerSlam Experience" through select professional basketball contests in order to win unique WWE prizes on DraftKings. One winner will receive the grand prize of attending SummerSlam at Barclays Center in August, get access to a VIP party and meet WWE Superstars and Divas.

Speaking to Benzinga, Lemelson Capital Management Chief Investment Officer Rev. Emmanuel Lemelson said that he finds it "unclear" how the partnership adds materially to WWE's profits.

Lemelson added that forging "minor partnerships" such as the one with DraftKings is "suggestive of the direction the company is heading" as he thinks it clearly won't drive greater profitability.

Related Link: WWE Pact Adds Further Legitimacy To DraftKings

"Net income, in part due to declining operating margins, has been deteriorating for about five years - the result is significant deficits that have contributed to a halving of owner equity since year-end 2006," Lemelson told Benzinga. "Ordinarily after such a showing, leadership would be examined by an independent board, however such scrutiny in this case is impossible as the WWE board, particularly in light of the recent additions, is anything but independent."

Shares of WWE closed Wednesday at $15.85.

Jayson Derrick and Brianna Valleskey contributed to this report.

Latest Ratings for WWE

DateFirmActionFromTo
Nov 2018JP MorganUpgradesNeutralOverweight
Oct 2018Morgan StanleyMaintainsOverweightOverweight
Oct 2018CitigroupMaintainsNeutralNeutral

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Posted-In: Barclays Center DraftKings Emmanuel Lemelson Lemelson Capital Management SummerSlamAnalyst Color Exclusives Analyst Ratings Best of Benzinga

 

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BACKeefe Bruyette & WoodsDowngrades29.0
AMTMorgan StanleyDowngrades170.0
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