Shares of WWE shot up nearly 20% in morning trading Friday as investors responded positively to news that founder Vince McMahon is returning to the board of the wrestling juggernaut.
The former CEO stepped down in June and officially retired a month later following claims of misconduct by himself and his head of talent relations. McMahon remained a controlling shareholder of the company he created in the 1980s when he bought up regional wrestling organizations.
The company said in a statement Friday that McMahon will return to the board of directors, along with Michelle Wilson and George Barrios, two former WWE co-presidents who were forced out in January 2020 as part of a management shakeup. The statement followed McMahon’s announcement Thursday that he was electing himself to the board, along with his two allies.
WWE’s announcement also suggested that the $6.3 billion company could be put up for sale, another catalyst for the stock.
“Together, we look forward to exploring all strategic alternatives to maximize shareholder value,” said the statement credited to co-CEOs Stephanie McMahon and Nick Khan and Chief Content Officer Paul Levesque.
“A review of strategic alternatives,” a phrase used in the statement, is typically code for exploring a sale of a company. “There is no assurance that this process will result in a transaction,” the statement said.
To make room for McMahon, Wilson and Barrios, three board members were jettisoned: JoEllen Lyons Dillon, who joined in September; Six Flags executive Jeffrey R. Speed, who served since 2008, and General Motors executive Alan M. Wexler, who served since 2018.
Two other directors, Ignace Lahoud, who joined in May, and Man Jit Singh, a board member since 2018, resigned effective Friday, the company said.
The departures put McMahon in a position to steer the process of a sale and any media rights negotiations for WWE’s content.
McMahon’s abrupt exit during the summer followed multiple claims of sexual misconduct, sparked by allegations from a former employee that she was paid $3 million in hush money to keep an affair with the CEO secret. A company investigation turned up a total of $14.6 million in hush money payments to four women going back to 2006. The company had to revise financial statements from 2019 forward to account for the payments.
WWE shares gained $14.11, or 19.6%, to $86.15 in late morning trading, and earlier reached a new one-year high of$86.36. The stock rose over the past year despite the broader market slump and is trading in territory it hasn’t approached since 2019.
