By Jason Powell, ProWrestling.net Editor (@prowrestlingnet)
WWE shareholder Scott Fellows has filed a lawsuit against Vince McMahon over the way he returned to the company. The lawsuit filed in Delaware’s Chancery Court and accuses McMahon of using his 81 percent voting control “to out three board members, replace them with loyalists, and push through bylaw changes that would ‘impose his will on the board and WWE,'” according to a story published by Bloomberglaw.com.
Powell’s POV: Fellows is seeking to have the bylaw changes invalidated and a reimbursement for costs and fees. I view the situation exactly as the lawsuit describes it, but whether it leads to any change remains to be seen.
Alternate heading:
“Shareholder doesn’t understand how Class B stocks and voting power work, files frivolous lawsuit.”
Wait, now you’re a stock expert too?!?
Class B shares are a common aspect of private companies going public. Typically they’re initially reserved for founders and immediate family members. WWE is more strict with theirs than most, restricting it to family with the shares converting to Class A if they’re sold to a non family member, but they’re still essentially the same.
Understanding what the data in SEC filings means, how different types of shares work, voting power within a publicly traded company, etc. isn’t difficult. Vince has 81% of the voting power, so he can basically do whatever he wants as long as it doesn’t violate current bylaws. Any shareholder trying to stop that via legal channels is either acting on emotion or simply didn’t do their due diligence before buying shares in the company. Either way, the lawsuit is completely frivolous.
And no, I don’t buy stock in individual companies most of the time because they’re far too difficult to predict despite how much data is freely available. Index funds, low cost rental units in near recession proof areas (like close proximity to a R1 university), and other safe bets outperform 99.9% of stock pickers and actively managed mutual funds anyways.
TheGreatestBrain, folks.