This past Tuesday evening on “Mad Money”, Jim Cramer praised one of his favorite stocks World, Wrestling Entertainment (WWE), by inviting CEO Linda McMahon on the show to talk about the growth of the company. Cramer, who professed that he had been following the stock for a long time, claimed that the recent dividend increase and earnings growth were signals to buy and that investors on Wall Street were “snobs” for not having invested in them earlier.

Last week, World Wrestling Entertainment (WWE) announced earnings for its fourth quarter 2007, beating analysts’ estimates by $17.6 million and sending the stock up 10% in intraday trading. Since hitting a 52 week low of $13.35 last year, the stock has vacillated between $14 and $16 a share with no momentum in either direction. With a recession looming and consumer spending slowing, it is interesting to note that the source of WWE’s recent growth was in consumer products and domestic live events. If we are in a period where discretionary spending is being cut, how could WWE have achieved such growth domestically in the last quarter?

Several months ago, World Wrestling Entertainment (WWE) was at a crossroads. After suffering a disappointing quarter headlined by their current failures in the film business (including a $15.7 million dollar impairment charge) and the death of one of their most prominent wrestlers, WWE has had to grapple with not only investors, but the media, fans and politicians.

With Congress breathing down its neck and the Albany DA asking for documents about online steroids sales, WWE had to take action. In late August, WWE complied with Congress by providing all documents about current wrestlers and their connection to the "Signature Online Pharmacy" case. The wrestlers who were involved were given suspensions of between 30 and 60 days, had their titles taken away, and were removed from current storylines. This was the first time WWE publicly suspended wrestlers for using performance enhancing drugs. It is unclear how effective this policy has been in preventing steroid use by WWE talent, however it is instrumental in once again gaining the publics' trust in the company and its product.