Investors Should Not Love EROS, says AlphaExposure in a long post that highlights key problems with the US listed company that markets Indian films. Due to aggressive accounting practices, EROS’ reported earnings are significantly overstating the economic reality of its business model EROS subsidiary financials reveal a lack of free cash flow and raise many questions about the company’s accounting EROS has enriched its controlling family at the expense of shareholders through a series of related party transactions Eros Now is poorly positioned to win the battle for streaming media in India and appears to have made meaningful misstatements to investors Based on the company’s persistent negative free cash flow and growing debt and share count, we believe the stock is worthless The big issue really is that the economic model has questions that have not seen convincing counter arguments by management. On the accounting front, there are legit questions. There are huge receivables – and receivables increased by $93 million, which was about 32% of revenue.… (Read On…)
[via Capital Mind » Capital Mind]
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