Emmanuel Lemelson Questions Leadership, Strategy at WWE

Mar 19 2015 | 5:47pm ET

Lemelson Capital Management CIO Rev. Emmanuel Lemelson has questioned the motivations of World Wrestling Entertainment’s (WWE) latest partnership with daily fantasy sports site DraftKings.

His latest criticism centers on WWE's partnership with DraftKings. WWE joined hands with the daily fantasy site to allow contestants to win prizes through professional basketball fantasy contests. 

The promotion has been called the “Ultimate SummerSlam Experience.” One winner will receive a grand prize of attending SummerSlam August, access to a VIP party, and opportunities to meet WWE Superstars.

But in a conversation with Benzinga, Lemelson said that it was “unclear” how this promotion would help drive boost WWE's profits. Lemelson said that WWE’s decision to engage in such “minor partnerships” was “suggestive of the direction the company is heading.” Lemelson questioned the firm’s financial standing.

"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 said in the interview with 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."

This is the latest criticism that Lemelson has levied on the professional wrestling entertainment company’s leadership. Lemelson’s firm shorted WWE stock in March 2014 when the stock traded north of $30 per share and earned a handsome profit when shares traded below $12 just two months later.

Lemelson then took a long position, and called for managerial changes at the firm and a sale of the firm. 

Given that its Chairman Vince McMahon owns 90% of the company’s voting shares, Lemelson won't be able to effect any change. That hasn’t stopped Lemelson from publicly questioning the company’s decisions on several occasions.

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