The Shorters have published an Article on Seeking Alpha analysing the results Eros Earnings Review: An Abundance Of Red Flags Hindenburg Investment Research
Worth a read, if you hold or are thinking of holding EROS . As in indication of what terms new cash lent to EROS, it quotes
"Part of the increase in financing costs can be explained by new debt, such as a new senior Term Loan secured by a pledge of shares of EIML, carrying an interest rate of 13%-14.25%."
There is also an article from Peel as well, who are not short, so its more objective, it still reckons there is a lot of downside in the equity. The next crunch point might be the potential equity raise,...
Not to me. I just keep track in the hope the bonds will reach maturity and pay out in 2021whilst collecting the coupons. I'd certainly be a lot happier if it was Apple I was lending my money to. But both shares and bonds have responded well today. For gamblers only, in my opinion.
Normally good or bad news is expected to affect share prices more than bond values. What is unusual here is that the EROS shares are up 5% on the day while the bonds are up 10%.
I make the shares up 16.5% (at $9.575) were up slightly more earlier on. They do seem to have a very complicated structure though and now I'm starting to worry about who actually owns the content library and therefore where the proceeds will go assuming they do sell to Apple (or anyone). As you can probably tell, I don't really trust the people running the company.
Whoops. Sorry about the fake news. Bad chart. Always double check your sources!
The bond has currently lost some of yesterday’s gain. I console myself with the thought that no ORB listed bond has ever gone belly up. Mind you, ORB is but a youth and has not yet had to endure very traumatic times.
There's always a first time. Fingers crossed (by me anyway) that it's not ERO1. Bond and share likely to get hammered if news turns out to be just another rumour.
The share price has staged a remarkable recovery, nice to see the shorters get a bloody nose. As far as I can see it's not driven by any public information, so for sure there is a lot of short covering, maybe some insider trading also? , I just keep an eye on this out of interest, too risky for me!
I know we should be seeing it as a warning but so hard to sell that 10%+ YTM I really don't like/trust the people in charge here but still, fingers crossed they can keep all the balls in the air for a while longer. Shares up another 3% plus as I write.
I think if you hold this bond you need to keep eagle eyes on it, I don't so I just have a passing interest, there is a convertible bond maturing before ERO1, that's one of many banana skins for ERO1, I personally sold out @72 a long time ago and have no regrets about it!
Up to 92.6 bid now. Re Paddy's comment I thought the convertible bond was the investment by Reliance that will be converted into equity.
Still very cautious on this one as I don't trust the company but happy to run a 9% yield on my 20k Sipp holding. It's a bit of excitement in a dull portfolio!!
Equity and bond hammered today on BIG credit downgrade. Commiserations to holders (I'm still one of them).
One lesson I guess, when things unwind it can happen very very suddenly.
Hands up all those that said that they didn't trust this company and the people running it but hung on for the yield and the hope that they would keep things aloft until 2021? That's me for one.
The credibility of this management is non-existent. I saw a note from an equity broker (who had only earlier this week reiterated equity target px at $20) today saying mgmt made a “clerical” error in not repaying $80m to the banks and will pay it by next week. I mean come on... they are not helping themselves at all.
Why don’t they buy back the bonds at 50c and reduce their leverage at the same time? Nice return for company + somewhat positive signal to the market.
This is a dodgy company. I could imagine the company buying as much as they could at these low prices (if they can get some cash), making a killing and leaving many investors out of pocket. A few years ago i had shares in Essar Energy another Indian company who floated took investors money and later returned private making a killing and leaving investors out of pocket. I commented on this in May 2015 and because of this didn't subscribe to Eros, thank goodness
Another credit downgrade and share price through the floor over the past few days. ERO1 also in freefall. I finally came to my senses, bit the bullet and sold yesterday at 63.25p for a sizeable loss.
Could have been worse, I could have waited and sold today.
Has anyone got a clue why the bond has moved up so much over the past few days on no news? Strikes me as a very shady company whose securities prices are seriously manipulated
And yesterday on Bloomberg (and no reaction on bonds!):
”Eros Tumbles After Delaying Annual Report for Auditors’ Review
By Catherine Larkin
(Bloomberg) --
Eros International briefly fell as much as 15% post-market after saying its annual report will be delayed. The shares pared declines and were down 2.4% at 4:25 p.m. in New York.
Auditors need more time to complete their report on the effectiveness of the company’s internal controls over financial reporting as of March 31; this is being provided for the first time since Eros is no longer an emerging company
Eros expects to file the form 20-F by 15 days after the prescribed filing date
NOTE: July 15, Eros 4Q Adj Ebitda $13.1 Mln, -46% Y/y; Shares Fall 8.8%
June 19, Eros Jumps as Company Decides to Review Options”
Comments
Eros Earnings Review: An Abundance Of Red Flags
Hindenburg Investment Research
Worth a read, if you hold or are thinking of holding EROS
.
As in indication of what terms new cash lent to EROS, it quotes
"Part of the increase in financing costs can be explained by new debt, such as a new senior Term Loan secured by a pledge of shares of EIML, carrying an interest rate of 13%-14.25%."
The next crunch point might be the potential equity raise,...
https://seekingalpha.com/article/4093651-eros-shelf-indicates-possible-coming-equity-issuance-continued-pressure-stock
Normally good or bad news is expected to affect share prices more than bond values. What is unusual here is that the EROS shares are up 5% on the day while the bonds are up 10%.
Whoops. Sorry about the fake news. Bad chart. Always double check your sources!
The bond has currently lost some of yesterday’s gain. I console myself with the thought that no ORB listed bond has ever gone belly up. Mind you, ORB is but a youth and has not yet had to endure very traumatic times.
Fingers crossed (by me anyway) that it's not ERO1.
Bond and share likely to get hammered if news turns out to be just another rumour.
From soar to plummet:
Poor results published today produced an 8%ish fall in both bond and share prices. And the spread is rather large. Hold firm and don't panic?
https://seekingalpha.com/author/alpha-exposure/articles#regular_articles
A planned equity raise seems to be the crunch point. I have no position in EROS, I cut my losses a while back.
Shares up just over 7% on Friday.
Perhaps time to clear out
I really don't like/trust the people in charge here but still, fingers crossed they can keep all the balls in the air for a while longer. Shares up another 3% plus as I write.
Re Paddy's comment I thought the convertible bond was the investment by Reliance that will be converted into equity.
Still very cautious on this one as I don't trust the company but happy to run a 9% yield on my 20k Sipp holding. It's a bit of excitement in a dull portfolio!!
Commiserations to holders (I'm still one of them).
One lesson I guess, when things unwind it can happen very very suddenly.
Hands up all those that said that they didn't trust this company and the people running it but hung on for the yield and the hope that they would keep things aloft until 2021? That's me for one.
The credibility of this management is non-existent. I saw a note from an equity broker (who had only earlier this week reiterated equity target px at $20) today saying mgmt made a “clerical” error in not repaying $80m to the banks and will pay it by next week. I mean come on... they are not helping themselves at all.
Why don’t they buy back the bonds at 50c and reduce their leverage at the same time? Nice return for company + somewhat positive signal to the market.
Could have been worse, I could have waited and sold today.
Has anyone got a clue why the bond has moved up so much over the past few days on no news? Strikes me as a very shady company whose securities prices are seriously manipulated
And yesterday on Bloomberg (and no reaction on bonds!):
”Eros Tumbles After Delaying Annual Report for Auditors’ Review
By Catherine Larkin
(Bloomberg) --
Eros International briefly fell as much as 15% post-market after saying its annual report will be delayed. The shares pared declines and were down 2.4% at 4:25 p.m. in New York.