Chicken Soup for the Soul Entertainment (CSSE) experienced a significant drop in its stock price in after-hours trading following the release of its second-quarter financial results.
Stock Price Plummets by 17%
CSSE's stock fell by 17% to reach 84 cents per share. This decline compounds the existing downward trend, as the stock has already plummeted by nearly 92% over the past year.
Increased Losses
CSSE reported a second-quarter loss of $40.4 million, equivalent to $1.50 per share, compared to a loss of $18.4 million, or $1.39 per share, during the same period last year. Notably, the company's share count has doubled in the past year.
Revenue Surges
Despite the widening loss, CSSE saw a significant increase in revenue, generating $79.9 million during the second quarter compared to $37.6 million in the previous year.
Acquisition and Financial Position
CSSE's acquisition of DVD-rental kiosk company Redbox resulted in an increase in debt. The company's debt stood at $511.9 million as of June 30, up from $479.7 million as of December 31. Conversely, cash and cash equivalents decreased to $6.9 million from $18.7 million over the same period.
Moving Forward
While acknowledging the need for a strategic approach, CSSE remains confident about its ability to continue operating for the next 12 months, backed by sufficient capital and access to financing. As part of this strategy, the board plans to establish a "strategic review committee."
