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Monday, February 6, 2023

Eros STX Global Corp. (ESGC) Stock Faltering in Aftermarket, Here’s the Reason

Eros STX Global Corp. (ESGC), a company that produces, markets, and distributes content to audiences around the world across traditional and digital media platforms, has plunged 23.05% in aftermarket trading session and consequently is trading at $0.22 at the time of the writing. During Friday’s regular trading session, the stock closed the day at $0.29 after declining 4.92% during regular trading hours. The plunge in aftermarket could be attributed to the announcement of the reverse stock split.

Why ESGC in Decline?

In late hours of Friday, ESGC announced that its Board of Directors had approved the one-for-twenty reverse stock split of the issued and outstanding A and B ordinary shares of the company. The split was to become effective from the 7th of February 2022. When the market would get opened on the 8th of February, the Company’s A ordinary shares will begin trading on a post-split basis. The press release further said that the Company’s A ordinary shares will continue to be traded on NYSE under the ticker symbol ESGC.

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Agreement with Najafi Companies

On 7th December, ESGC announced that it has entered into a definitive agreement with an affiliate of The Najafi Companies, for selling its STX Entertainment subsidiary. The Najafi Companies is an entrepreneurial private investment company that has some significant holdings in numerous sectors like consumer, media, talent-driven brands, eCommerce, tech, and sports. According to the agreement, the said company would acquire STX Entertainment through the purchase of all of the issued and outstanding shares of common stock of a parent company of STX Entertainment.

Bollywood Film Festival from Eros Now

In early November, ESGC announced that its subsidiary, Eros Now, a leading over-the-top (OTT) South Asian entertainment platform, would launch the month-long Bollywood Film Festival on Facebook Watch on the eve of Diwali. Under the said collaboration, Eros was to be premiering a movie from its library of 12,000 movies every day and stream it from Eros Now’s Facebook. The said program was to start from the 3rd of November and was planned to be continued till the 2nd of December 2021.

Future Outlook for ESGC

During the last three months, ESGC stock has declined more than 60%, but the more recent stats provide an optimistic picture for the stock. During the last month, the stock has gained an increase of more than 20%. Looking ahead, analysts believe that the stock holds several negative signals, and hence, is expected to perform weakly during the upcoming couple of weeks.

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