(Bloomberg) -- World Wrestling Entertainment Inc. ousted two of its top executives after 2019 earnings came in at the low end of estimates, a shake-up that has rattled investor confidence in the pro-wrestling giant.
Shares of WWE plunged as much as 24% to $47.50 in extended trading after the company announced the departure of Co-Presidents George Barrios and Michelle Wilson, effective immediately.
Frank Riddick, a board member for more than 11 years, has been named interim chief financial officer, WWE said Thursday. He'll report to Chairman and Chief Executive Officer Vince McMahon, the billionaire who often serves as the face of the company.
"The board and I decided a change was necessary," McMahon said in a statement. "We have different views on how best to achieve our strategic priorities."
Writing on Wall
The reshuffling follows a difficult stretch for WWE, whose stock was crowned only two years ago by KeyBanc Capital Markets as "one to own in media."
After a string of negative headlines in 2019, investors had grown concerned about both WWE's upcoming contract renewals and a public-relations fallout surrounding the treatment of its wrestlers.
Media reports had hinted that management was struggling to renew distribution contracts overseas, including international deals in key regions such as the Middle East. And earlier in the year, John Oliver, the comedian and late-night talk show host, had criticized WWE's McMahon in a segment on "Last Week Tonight."
Read more: WWE Plunges Most Since 2014 as Delayed TV Deal Slams Forecast
Oliver said that wrestlers were dying at a faster rate than professional football players, and that WWE failed to provide health insurance because the company deemed its talent independent contractors. WWE later rebuffed Oliver's assertions, pointing to its "longstanding" talent wellness initiative. The program offers wrestlers a yearly physical and testing for brain function and substance abuse.
Better Days Ahead?
In recent months, Wall Street had seemed to grow more optimistic about WWE -- following the expansion of a live event partnership in Saudi Arabia and an agreement with Fox Corp. to air "Friday Night Smackdown" in the U.S.
Event programming, encouraging long-term TV contracts and relatively predictable revenue alongside cash flow growth makes the company "well positioned," Alan Gould, an analyst at Loop Capital Markets, said in a note last month.
Approximately 90% of analysts on Wall Street recommend a buy-equivalent rating on the stock, according to data compiled by Bloomberg. And some of the company's initiatives, like its streaming-based WWE Network, appear promising.
But the Stamford, Connecticut-based company offered a dimmer outlook on Thursday. It now expects to report 2019 adjusted earnings of $180 million, down from as much $190 million as previously forecast. The new projection trails the nearly $186.6 million that consensus estimates were calling for.
WWE is scheduled to release its final results on Feb. 6.
The company is working to re-energize fans with new talent -- and some well-known names from the past.
Terry "Hulk Hogan" Bollea, arguably the biggest star to come out of the wrestling industry next to Dwayne "The Rock" Johnson, is making a bid for a comeback in 2020.
"Wrestlmania is right around the corner Brother!" Hogan, 65, teased in a social media post this month on Twitter.
But McMahon will need more than wrestling veterans to get the company back on track.
The executive said Thursday that WWE is up to the challenge.
"The board and I have great confidence in our collective abilities to create compelling content, engage our global fan base across platforms, increase revenues and drive shareholder value," he said.
(Updates shares in second paragraph.)
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