Eros

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  • Not all bad news for Eros.

    from 'seekingalpha.com' which is essentially a forum like this one, but more mature and sophisticated. It has different contributors like this, and has a range of views. The point about 'AlphaExposure', whoever he is, is that he gives one side of the argument, in order to profit his short position.


    http://seekingalpha.com/article/3642386-disappointing-earnings-activist-investing-daily


    "Knight Assets is active at EROS (NYSE:EROS) and has been for several months and has a price target of $68 a share. Eros got taken to task by a short report, claiming the company to be worthless. Eros is now down 60% for the last three months.

    However, Eros now has Dalton Investments as another activist, which has a 6.2% stake. The fund took its stake up from 2.3% and says it bought more because it thought shares were undervalued and were an attractive opportunity. It also mentioned the fact that Eros has a market leading position in the Indian film entertainment industry. It plans to continue to engage with the company about corporate governance, board composition, management, operations, business, financial condition and strategic plans."

    Eros is a much more complex story than we would like, but the news is not all one way. There is the possibility of Redemption !




  • Yes, and when it comes to bonds, redemption is everything.
  • Latest Rebuttal to AlphaExposure:

    https://financialfactfinder.wordpress.com/

    The equity seems less responsive to AlphaExposure these days.

    I repeat, it makes no sense for the Bond to be more volatile than the equity.

    Either the bondholders are over reacting or the equity holders are under reacting !

    ERO1 was always a high risk bond. A2D was always a low risk bond, A2D got a lot of flak at the time it was issued, but maybe people can now appreciate it's attractions better.
  • Paddy,
    As you say, it is very odd for a bond price to drop so much compared to equity.
    Interesting that Mark Glowrey indicates in page 175 of his book, that opportunities can set in due to "the overreaction to bad news". I think that in this case an opportunity is in play, in particular for those investors who don't presently have a holding.
    For an organisation to "short a stock", and then to make public statements that it's finances aren't as good as published maybe an "act of desperation", who knows!
    I have therefore earlier this week taken a small punt @ .5496

    Not a great lover of this stock due to my previous comments (@ issue), however the truth is likely to surface shortly. Subject there being no fraud (no suggestion) I suspect the bond price will over a period time increase, but perhaps only to the low 90s due to "market doubts"
  • Well, the equity is now getting very volatile. The EROS management are not being wholly transparent ( see link ).

    "Eros Int'l Shares Sell Off $1+ Over Last Few Mins as Traders Passing Around Comment from CFO at Wells Fargo Tech, Media, Telecom Conference List of Films Distributed Will Not Be Published"

    Read more: http://www.benzinga.com/news/15/11/5974245/eros-intl-shares-sell-off-1-over-last-few-mins-as-traders-passing-around-comment-#ixzz3rDKwjxRa


    The EROS International Results should be filed soon. The stakes are very high, in the past most Execs that have acted fraudulently in the management of US listed companies have been given very long jail terms.

  • I suspect a double bluff is at work here - dangerous manoeuvres if I am correct - but I can't be certain enough yet to put my money on it
  • I doubt if EROS are playing a double bluff, I reckon the intention of the investor day was to raise more equity, that is out the window now.

    I think the shorters won't be able to force the equity to zero, in the near term , without some hard news. The next SEC filing of Profits is likely to be the next hard news ( should be next week, I think).

    I don't know at what point the SEC would get involved to try and independently establish the true state of affairs.

    Cashflow is the other thing that could kill the business quickly.

    The hope for the bondholders, is that after this mess is sorted out, there is a viable business, clearly the market is pricing this as NOT the most likely scenario. Even then, the problem is, that EROS will have a hard time raising fresh capital.

    I think there will be some equity shorts taking profits at some point causing 'short rallies', but they are noise as far the the bond holders are concerned.

  • Plenty of trades today on orb (Bond) with prices down / up like a tennis ball!
  • This is just crazy -the stuff of casinos and not what a bond should be about - it's more volatile than the most volatile shares that I hold. I took a medium sized chunk initially but when it started a long way off par I decided to get out for break even once interest taken into account when it made a brief revisit of par for about a day... Glad I did but never expected this to be trading anything like these levels. In the meantime the share is well down on the us market tonight so looks like this will continue for the moment. Not a great advert for ORB which looks like it has essentially dried up this year from a new issues perspective
  • Hmm. So share price down another 20+% on Friday to sub $7 so probably more falls to come next week but say the price goes down to $1 for even a very extended period but avoids going to zero, where does that leave the bonds?

    I bet the BOD are regretting switching their share listing from London to NY. If all these charges are even partly true then they are likely to get a much tougher ride over there than they would have here.
  • Eros International to Report Fiscal Second Quarter 2016 Results on November 17, 2015

    https://www.nyse.com/quote/XNYS:EROS/news

    One way or the other the Q2 results will make or break the company. Transparency is key to rebut all the accusations.
  • They'll definitely make for interesting reading. Problem is that lots of people now don't believe what they (Eros) say and I'm sure the shorters will be all set for another attack.

  • The soap opera continues . . . follow the link in the post above and you get this breaking news

    Bragar Eagel & Squire, P.C. is investigating potential claims on behalf of Eros International Plc (NYSE: EROS) investors concerning whether the company’s officers and board of directors violated the federal securities laws.
  • Earnings out - looks pretty solid. Bonds have popped 9.5pts so far (before the call). In case anyone wants to dial-in at 1:30pm today:

    To access the call please dial 212-444-0481 from the United States, or +44 (0) 20 3478 5300 from outside the U.S. The conference call I.D. number is 3400497. Participants should dial in 5 to 10 minutes before the scheduled time.

    A replay of the call can be accessed through November 24, 2015 by dialing (347)-366-9565 from the U.S., or +44 (0) 20 3427 0598 from outside the U.S. The conference call I.D. number is 3400497. The call will be available as a live webcast, which can be accessed at Eros’ Investor Relations website. A replay of the webcast recording will be available until November 17, 2016.
  • Equity currently up just over 20% 10 mins after the open today
  • Sorry for this long "edited and cut/paste" job. Thought those involved might appreciate this.

    Eros Says Rock Solid Backing by Temasek to Counter Short Sellers
    2015-11-18 15:09:09.590 GMT
    By Ameya Karve
    (Bloomberg) -- Eros International Plc said backing by its two largest investors Capital Group Cos. and Temasek Holdings Pte will help the Bollywood film producer counter short sellers who have pummeled its New York traded stock.
    The shares tumbled 79 percent from its Aug. 19 record of
    $37.60 through Tuesday, making it the worst performer on the Bloomberg World Entertainment Index, after anonymous Twitter users and a blogger called Alpha Exposure cast doubt on the company’s financials, the number of subscribers at its Eros Now digital service and its revenue derived from the United Arab Emirates. U.S.-based short seller Glaucus Research Group’s Director Soren Aandahl on Nov. 5 said the company’s shares are worth $0.
    “We have rock solid shareholders, such as Capital and Temasek, who are standing by us like pillars and giving us good advice,” Eros Chief Executive Officer Jyoti Deshpande said in an interview in her office in Mumbai. “They said just put your head down and get to work.”
    Shares at the company’s Indian unit rose the most in two weeks after Eros on Tuesday reported profit that beat analysts estimate. The producer of “Bajrangi Bhaijaan,” featuring Salman Khan in the lead role, is focusing on expanding its Eros Now service, said Chairman Kishore Lulla. The digital platform has
    30 million registered users and the company will be “happy” if it can convert as many as 10 percent into paying subscribers, he said.

    Anonymous Blogger
    “Eros’s performance in the second quarter seems quite in contrast to the allegations and the company seems to have managed to convince the people on most of the parameters,” said Jigar Shah, an analyst at Mumbai-based Kim Eng Securities Pvt.
    Kim Eng recommends buying shares of Eros’ Indian unit.

    Stake Sale
    “We are expecting significant contribution to revenue from Eros Now in fiscal year 2018,” CEO Deshpande said.
    Eros was in advanced talks in July to sell a 10 percent stake in Eros Now to Singapore-based Fullerton Fund Management Co. that would value the unit at $800 million, people with knowledge of the matter said then. Lulla declined to comment on the stake sale.
    “The stake sale in Eros Now will be a very positive news for the company as it will boost the cash flow and bring in external investor credibility,” Kim Eng’s Shah said.
  • A couple of more positive days on the equity price following second quarter earnings report but more from seeking alpha today on the reasons to be worried:

    http://seekingalpha.com/article/3697376-eros-understanding-the-organizational-structure-and-writing-to-the-sec
  • Who knows what's going on with this company!

    Equity up 20% at the time of typing at 10.4. Could well end down on the day the way things are going with this company though.
  • End of day close on NYSE was 9.91 (up 15.23%)
    Perhaps "Alpha Exposure" is now being "exposed" to his lack of "accounting skills"?
    There may be some "half truths" on what has been reported, however one would assume that EROS management team together with Grant Thornton will be ensuring this "film episode" will not happen again.
    Hopefully, also as a result, the Audit Committee will be strengthened with a Chairman from one of the top audit firms; would be very interesting to see it's next meeting minutes!
  • Yes, it seems that "Alpha Exposure" has over-egged it in his last post and letter to the SEC (which was posted and then deleted, when the accounting errors were pointed out to him). No doubt "Alpha Exposure" has suffered a loss of credibility, to a degree. His tweets had taken on a “Rambo” tone and style, which was also damaging his credibility in the eyes of most fair minded observers.
    I was a bit curious as to why he seemed to be obsessed with this ‘0 Stock Price’ target. Maybe it is because as an experienced shorter, he knows that when ~25% of the equity float is short and they try to close/buy back, the race for the exit will cause a ~20% jump in the SP, denting their short selling profits (If the stock was delisted / suspended, then I guess they wouldn’t have to buy it back?).

    Anyway, despite the loss of face and losses on his short position, “Alpha Exposure" has raised some pertinent questions that will be answered by means of due process of law.

    Some class action suits have been filed, if they actually go all the way then we will get a result one way or the other on the allegations.

    I would have thought the SEC would have been talking to EROS informally, already, I would expect them to come up with some conclusions on the allegations in the fullness of time.
  • Eros bond making a comeback - quoted 60.5-63.5 today - on the back of 20.5% share price pop yesterday.

    They were supposed to report the Skadden findings in March if I recall. I wonder if whisper associated with the report is behind this move. If there is any positive news, short-squeeze (still nearly 25% in short-interest) will drive this stock further. Which can only be good for the bonds.

    Hang in there longs - this ride is far from over.


  • Yes, the shorters have had their fingers burnt, and there is still a lot more shorts to be closed, HOLD for me.
  • I think most of the claims about Eros have been debunked so far. Only the receivables are still an issue. I have read the transcript of their recent confcall (after last earnings) and I am inclined to believe the company. They are focusing on sales which would generate immediate cash flow instead of many months later. There is light at the end of the tunnel!
  • VSIVSI
    edited March 2016
    For whatever it is worth... Will be very interesting to see how the stock (and bond) reacts to this - if at all!


    Eros International Announces Completion of Internal Review
    ISLE OF MAN, United Kingdom -- March 21, 2016

    Eros International Plc (NYSE:EROS) (“Eros” or the "Company"), a leading global company in the Indian film entertainment industry, announced today that, with the assistance of Skadden Arps Slate Meagher & Flom LLP, the Company's Audit Committee has completed the internal review which it commenced in November 2015.

    The review included analysis of the Company's financial reporting for the following areas: (i) UAE sales and revenue recognition, (ii) amortization policy of intangibles, including film and content costs, (iii) related party transactions, (iv) ErosNow registered users count, and (vi) Eros’ film library. Having completed its review, the Audit Committee remains satisfied with the Company's financial reporting and disclosures in its financial statements as filed.

    Jyoti Deshpande, Chief Executive Officer of the Company, stated, “We are pleased the Audit Committee, with the assistance of Skadden Arps Slate Meagher & Flom LLP, has completed its thorough internal review, and reinforced its confidence in the Company’s accounting policies, practices and disclosures in the Company’s financial statements and other key metrics. We reiterate that the Company maintains the highest standards of integrity and transparency in financial reporting. I am positive that our strong business fundamentals will continue to help us build on our market leadership position.”
  • VSI: This is the reason the Equity have been rising (and Bonds following) over the past few days. HOLD and hope we get into the 80-90 range over the next couple of months.
  • Saga share direct were offering these at 70.75 mid afternoon, I declined, not convinced to be honest. A couple of good comments on the discussion board of Interactive Investor
  • Colin, don't blame you, EROS has given Long Term holders a lot of worry, A2D and Alpha Plus have been no worry (for less coupon)
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