— According to recent filings by WWE, Vince McMahon is selling part of his stake in the company through Morgan Stanley, pricing it at $38 per share. He would be selling over 2 million shares according to sources (not the 3.5 million noted below which is more like a maximum) while working with undisclosed bank to provide “current liquidity” according to the filing. McMahon could choose to settle the deal in cash, while still controlling ownership of the pledged shares and thus his controlling interest in WWE.
On March 24, 2020, Vincent K. McMahon (“Mr. McMahon”), Chairman and Chief Executive Officer of World Wrestling Entertainment, Inc. (the “Company”), entered into a variable prepaid forward contract with an unaffiliated bank (the “Bank”) covering approximately 3.5 million shares of the Company’s Class B common stock. The variable prepaid forward contract is scheduled to settle on specified dates in March 2024, at which time the actual number of shares of the Company’s Class A common stock to be delivered by Mr. McMahon will be determined based on the price of the Company’s Class A common stock on such dates, with the aggregate number not to exceed approximately 3.5 million shares, which is the number of shares of Class B common stock pledged by Mr. McMahon to secure his obligations under the contract. Subject to certain conditions, Mr. McMahon can also elect to settle the variable prepaid forward contract in cash and thereby retain full ownership of the pledged shares.
Mr. McMahon entered into the variable prepaid forward contract to provide current liquidity while allowing him to maintain voting and ordinary dividend rights in the stock, as well as the ability to participate in future stock price appreciation, during the term of the contract and thereafter if Mr. McMahon settles the variable prepaid forward contract in cash.
The shares covered by the variable prepaid forward contract represent approximately 4.5% of the Company’s total outstanding shares of Class A and Class B common stock. The variable prepaid forward contract does not apply to the approximately 25,198,344 other shares of Class B common stock beneficially owned by Mr. McMahon. Those shares represent approximately 70.5% of the Company’s total voting power. The variable prepaid forward contract contains a 60-day lock-up restricting Mr. McMahon’s ability to sell or transfer additional shares of the Company’s common stock during such period without the Bank’s prior approval. Mr. McMahon has informed us that he intends to continue in his capacity as the Company’s Chairman and Chief Executive Officer for the foreseeable future.