InvestorQ : I am holding shares of Zee and saw results below expectations. Should I hold on to the stock?
Riya Dwivedi made post

I am holding shares of Zee and saw results below expectations. Should I hold on to the stock?

Answer
image
rhea Babu answered.
3 years ago
Follow

In the case of Zee Entertainment, the profits were up by 7% and the subscription revenues were below estimates. But that is not the real point to worry as an investor. You should worry about the fact that the company has written off Rs.171 crore of ICD. This is a major corporate governance issue as this ICD has been apparently given to a group company and the shareholders are being asked to take the loss of the group transactions, which are already opaque in the first place. Also, VTB Bank of Russia, which has 11% of the stock of Zee pledged with it, could also start selling the shares in the market using the results as a pretext for exit.

As an investor you must ideally be out of the stock right away. The corporate governance issues and the huge pledge are warning signals for investors to stay away from the stock. I suggest you exit the stock at the first opportunity and look for better options to invest in. If you really want to buy a media stock, you can look to buy something like Sun TV, which has less of these kind of problems.

6 Views