Earlier we had reported that the stock of Eros International had taken a hit at the New York Stock Exchange (NYSE) after analysts raised red flags on the company's receivables and user count of its streaming service ErosNow. Now we hear that the Indian production giant faces yet another problem as a Boston-based law firm Block & Leviton that represents investors nationwide has launched an investigation into the company.
This investigation comes after the significant drop in Eros' stock price on the news that Eros has overstated its revenue and the number of films it has distributed over the last two years. In fact as per the theory on which the investigation is based, Eros has apparently overstated its theatrical revenue by 82% and 104% during fiscal years 2014 and 2015 respectively and that the company also overstated the number of movies it has distributed by 124% and 200% during fiscal years 2014 and 2015.
With this new development Eros International's stock price fell more than 31% to close at $8.25 on Wednesday, resulting in a loss of more than $100 million in the company's market capitalization.
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