World Wrestling (WWE)
I was watching -- as I do every morning -- CNBC... and they begin talking about World Wrestling Entertainment (WWE). I'm laughing -- because it was a "who knew?" moment for me. Really? WWE is a publicly traded stock? WOW... So as usual I poke around on the internet to see about this "down for the count" winner... UGH. Who would invest in TV "wrestling" in the first place? Never mind - that's a rhetorical question.
So -- pull up a chart -- it's been a sub $10 stock since 2011... and HAD never been above $20 since day one... SUDDENLY it climbs to $30 since December - and this thing has a chart that goes straight up! Like a tsunami. By the way - it pays a dividend despite have ZERO P/E... so they're losing money (which is explained by seeing a "Dash" where P/E should be... Money losing companies shouldn't be paying a dividend --- and if you're in a money losing company that is paying a dividend -- you SHOULD EXPECT THAT DIVIDEND TO DISAPPEAR. But that's a different issue -- but one you should KNOW and UNDERSTAND. (One of the reasons I'm writing this morning).
Now -- I have no idea why WWE (and frankly don't care)... would be a $10 stock and in mere months it goes parabolic and runs to $30... so if that's happening -- there should be a FUNDAMENTAL REASON for that and it should be well known. A FUNDAMENTAL reason would be something like -- they started minting cash... or they're getting bought out... or they signed a big deal that will start minting cash... But I couldn't find any reason for this gigantic move. Warren Buffet didn't announce that he just bought a big position in the company.
For Investing 102.... when you see something like this... PLEASE AVOID IT LIKE PLAQUE.
Once it peaked -- the selloff began -- it peaked in Mid-March... and this morning it opened DOWN 47%. How would you like to wake up and see you've lost half of your investment? GEEE --- My bigger question would be -- why did you "invest" in something like this in the first place!?!?!?!
The take-away here.... Unless there is some fundamental NEW information --- that would be reason to buy a name -- the fact that it's going up based on nothing.... is reason to avoid whatever it is. Because when people realize there's no reason behind the move -- it will fall back down. If you bought at the high or near the high -- you now own a $11 stock -- that's down $20 in 60 days.
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