Strange Things Are Afoot at WWE HQ


Last month, WWE’s stock hit a 52 week high of $23.63 less than 7 months after dipping to a close of $10.05 in January.  While this may give the impression that WWE’s stock price is on a roll, insider selling (the common term used when top executives sell shares) raises some concerns.

  • Michael Luisi – President of WWE Studios sold 29,894 shares in the month of August, reducing his holdings in WWE by approximately 40%
  • Michelle Wilson – WWE Chief Marketing Officer sold 25,000 shares reducing her holdings by almost 30%
  • Kevin Dunn – Executive Producer sold 40,000 shares reducing his holdings by approximately 20%
  • Mark Kowal – Corporate Controller sold 6,000 shares reducing his holdings by approximately 33%
  • Stephanie McMahon Levesque – WWE Chief Branding Officer sold 174,069 shares in August, reducing her holdings by 7.1%
  • Basil Devito – WWE Senior Advisor of Business Strategy sold 4,100 shares in August, reducing holdings by approximately 5%

Now before anyone goes full on Chicken Little, it should be noted that there are several reasons why insiders sell stock.  In some cases, they are simply looking to diversify their portfolios or reduce risk.  Costly events such as weddings or college tuition can also drive insider sales.  People use automatic buy and sell triggers that go into effect once a stock hits a certain price, which was the cause of some of this selling.  That being said, it is worth noting the number of high level executives that all sold significant percentages of their holdings in August.  

The general consensus is that this has more to do with profit taking than anything else.  Historically, WWE’s stock price rarely gets over $20 per share.  The last time this happened was in early 2014 when it broke out to the low 30s before quickly cratering back into the the $12-$15 range.  As most of these insiders have been with the company for some time, chances are they didn’t want to miss out on another profit taking opportunity.

Even so, insiders selling 20-40% of their holdings can be read as a serious lack of faith in the direction of the WWE.  While paid network subscriptions continue to grow, the company does not appear to be bringing in new fans.  Ratings for Raw continue to sag and the company seems to be struggling in terms of finding a future “Face of the WWE” to replace John Cena.  As much as I love both NXT and the main roster, I don’t see anyone capable of taking the torch from Cena, especially with the little kids.

As stated in the company’s most recent quarterly filing, WWE live events are facing challenges.  Taking out Wrestlemania (as it was booked in Q1 2014 vs. Q2 in 2015), live event revenue only increased by $2 million despite the fact that there were 12 additional live events in Q2 2015.  The reason for this?  Attendance.  Live events drew an average of 5,400 in Q2 2015 vs 7,000 for the same period in 2014.  

As someone who plays the Wall Street ponies, I don’t blame any of them for taking money off the table, especially considering how much the stock has gone up in the past 9 months.  I won’t own it at this level as there’s way too much risk trying to project the growth of the network.  The bottom line is that if the company doesn’t find their next Cena/Rock/Austin/Taker, WWE is likely going to have some serious long term issues.

Disclosure Statement: I have no positions of WWE stock and have no plans to initiate any positions within the next 72 hours.  I have no business relationship with any company or individual mentioned in this article at the time of publication.  Also, please note that I am not an analyst and these are just my opinions based on insider sales data.  If you’re looking for investment advice, talk to a professional and don’t heed any advice from rank amateurs like myself.

Posted in The Ponies, Wrestling.

User Behavior Isn’t A Ranking Factor? So Sayeth the Google…


Yesterday, John Mueller (the guy who’s essentially become the face of Google while Matt Cutts has been away) was asked whether user behavior on your website is a ranking factor in a Google Webmaster Hangout.  Mueller’s answer was as follows:

So in general, I don’t think we even see what people are doing on your web site. If they are filling out forms or not, if they are converting and actually buying something… So if we can’t see that, then that is something we cannot take into account. So from my point of view, that is not something I’d really treat as a ranking factor.

But of course if people are going to your web site and filling out forms or signing up for your service or newsletter, then generally that is a sign that you are doing the right things. That people are going there and finding it interesting enough to take a step to leave their information as well. So I’d see that as a positive thing in general, but I wouldn’t assume it is something that Google would pick up as a ranking factor and use to kind of promote your web site in search automatically.

I’m calling bullshit on this.  I’m not a tinfoil hatter by any means, but the idea of Google not looking at user behavior just doesn’t ring true to me at all.  And what’s with the “I don’t think” stuff?  Plausible deniability?

Obviously only the folks at Google know what the ranking factors are, but I find it extremely hard to believe that things like bounce rate, session length, session depth and positive actions (filling out forms, placing orders, etc) have no impact on rank.

The whole point of of Google constantly changing and updating their algorithm is to keep moving forward and improving, right?  So why wouldn’t Google look at user behavior to determine page quality as compared to the term being searched?  The whole point of Panda was to reward and rank higher quality sites and black hatters have proven time and time again that they can rank with shitty spun content, so why wouldn’t Google use these data points that they collect to determine relevance?

Now I know that not everyone has Google Analytics code installed on their servers (although most sites do), so I suppose it would be unfair to reward certain actions, but consider this scenario:

  • User does a search
  • User clicks a link from the search results
  • User sees the site and bounces (leaves within seconds of arriving) by hitting the back button
  • User clicks on the next search result
  • User doesn’t go back to the search results

This seems like a fairly clear signal that the first link didn’t have information that matched the search query while the second link did.  If this happens over and over again, are we really expected to believe that Google will choose to ignore something that is so clearly a behavior resulting from a site not returning information that is relevant to the search term?  Didn’t think so.

It seems that I’m not the only one with this opinion:



Posted in SEO Crap.