Zee shares plunge after failed merger with Sony

Zee Entertainment's shares nosedived on Tuesday, plummeting a record 30%, in a stunning sell-off triggered by the collapse of its long-awaited $10 billion merger with Sony Pictures India, reports Reuters. The failed deal, once touted as a lifeline for Zee in the face of fierce competition, now casts a dark cloud over its future, fueling anxieties about its ability to stand on its own amidst industry titans.
Investors abandoned Zee in droves, spooked by the uncertainty created by the deal's demise. Analysts, too, sounded the alarm, with a couple of brokerages recommending investors ditch Zee's stock, according to data from LSEG.
The fallout was swift and brutal. Zee's market value shed a staggering $800 million, nearly four times the entire market cap of its media peer NDTV. The magnitude of the loss underlines the desperation Zee may face in the wake of the merger's collapse.
The proposed union with Sony was envisioned as a formidable counterweight to the emerging media behemoth formed by the planned mega-merger of Disney and Mukesh Ambani's Reliance Industries. Additionally, it aimed to provide a stronger platform to compete against streaming giants like Netflix and Amazon.
However, with the talks falling apart after two years, Zee is left grappling with multiple challenges. Its profits have dwindled, advertising revenues are drying up, and cash reserves are shrinking. The failed merger only amplifies these existing woes, leaving investors wary of its prospects.