Zee shares snap 3-day fall, jump 7% today; here's a likely reason why

Shares of Zee Entertainment Enterprises Ltd rose sharply in Tuesday's trade, pausing their three-day losing run. The stock surged 7.47 per cent to hit a day high of Rs 192. Despite the mentioned rise, Zee shares have slipped around 35 per cent on a year-to-date (YTD) basis.

Today's sharp up move in the share price could be attributed to a few news reports claiming that Zee is re-engaging with Japan's Sony Group Corp in a last-ditch attempt to save the $10-billion merger deal that was officially terminated on January 22.

Sony terminated the merger with Zee due to certain unresolved conditions and leadership disputes, including disagreements over CEO Punit Goenka's involvement in regulatory issues.

During an earnings call, Goenka had mentioned that the termination was reviewed by his board and appropriate steps were taken in consultation with the legal experts. Zee even approached the National Company Law Tribunal (NCLT) to seek directions on the implementation of the scheme, he said.

"I certainly wanted the merger to be implemented. In line with this aspiration, we even took several steps towards divestment or closure of profitable businesses in the domestic and international markets. I personally offered several proposals and solutions to Sony, to address their demands, but unfortunately, they remained unaccepted. Since the matter is sub-judice, I would not like to say more and let the law take its own course," Goenka stated.

On BSE, around 12.74 lakh Zee shares changed hands today. The figure was lower than the two-week average volume of 17.28 lakh shares. Turnover on the counter came at Rs 23.96 crore, commanding a market capitalisation (m-cap) of Rs 17,846.45 crore.

The stock was seen trading lower than the 5-day, 10-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs) but higher than the 20-day SMA. The counter's 14-day relative strength index (RSI) came at 43.46. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a negative price-to-equity (P/E) ratio of 128.43 against a price-to-book (P/B) value of 1.74.

As of December 2023, promoters held just 3.99 per cent stake in the media firm.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

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