I have been an investor since 1.5 years in Saregama and had a high conviction in current MD and in general have good outlook for content industry. But i was feeling a bit Jittery about the QIP they raised, but still invested because, they were planning for a long term investment to acquire music.
But in recent investor meet, most of the funds are just laying there. So my outlook on Saregama management turned negative for few reasons.
- The funds collected are invested over time, as music is produced over time, unlike some Pharma company creating a factory. So why dilute the stock, why cannot they take loan when it is needed.
- Their movie business, started with content rich movies, and slowly they are producing now the Commercial movies, hence taking more and more risk.
- Recent times, the commentaries are very vague with no details (or i am biased because of all the negativity in my brain)
Right now on HOLD. You think i am thinking in right direction or am i overthinking.
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