New Delhi: Zee Entertainment shares are now down a massive 30 per cent in a single trading session.
Zee is trading at Rs 161, down 30 per cent. The lower circuit has been moved down to 35 per cent.
After more than two years of deliberation, Sony has terminated its merger cooperation agreement (MCA) with Zee and sought a termination fee of USD90m from the company for an alleged breach of the MCA.
Zee has said that it would evaluate all its options, including a legal action. Surprisingly, it has mentioned that Punit Goenka, Zee’s MD and CEO, had agreed to step down, a key bone of contention between the two parties. “As a result, we downgrade our rating on the stock to Neutral,” Motilal Oswal Financial Services said.
The company’s performance has been abysmal for the last four years as ad revenue declined 14 per cent over FY20-23 due to weak market conditions and continued market share loss over the last 4-5 years, from over 20 per cent to sub-17-18 per cent.
At a time when the industry is seeing a shift toward OTT, Zee5 individually would be on a weak footing, playing the second fiddle in a market dominated by strong players like Disney, Netflix, Amazon Prime, and Reliance Industries-led Network18. This is unlike the linear TV market, in which it has maintained its position among the top two players for a prolonged period, the report said.
(IANS)
