I also read this on Twitter. It was a big puzzle why Eros Plc shares are crashing in USA market. Today it got answered by Bloomberg post. Here are my understanding of this. Eros Media International and Eros PLC has just relationship of holding company. EMIL( Eros Media international, BSE listed company) has no stake in Eros Now platform. It only gets revenue from Movie production, distribution in India, TV syndication. Eros takes care of digital platform. There is no definitive agreement between these entities yet on revenue sharing.
EROS earns revenue from Digital platform and overseas distribution. As per the twitter handle Market_farce, the number of users in Eros now is over rated. He is citing sites like App annie. App annie can only track downloads done thru Market place. Eros Now has a bus app which you can down load thru wifi network. I have downloaded it in Goa trip. I guess EROS adds those number as subscription which will not be visible on App annie. I think we should take these numbers with a pinch of salt. Digital world with number of subscription is always over rated, be it Google also. I have developed app and published it and find these number funny.
I am scared of their claim of inflating numbers from UAE. It does not impact EMIL a bit. However it just raises doubt on Promoter integrity. I have contacted investor relation on this. They gave clarity to USA analysts, they should do this to Indian analyst too.
FII are net seller in Sept quarter which is also worrisome. Finger crossed.
Disc:- I have 1% portfolio holding. Was building conviction and this story pops up.
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