Actions of Eros International (NYSE: EROS) climbed higher on Friday after announcing a new partnership with Visa (NYSE: V) in India, strengthening its leadership position in the country. From 1:00 p.m. EST, the title increased by 8%. But he had traded 18% higher at one point.
The Visa partnership is the only news specific to Eros explaining the evolution of the title. However, investors may send the stock higher due to the good results from other media companies this week.
Eros International offers a leading streaming service in India called Eros Now. Thanks to its new partnership, Visa card holders in India can subscribe to Eros Now for half the normal price. The platform had 26.2 million paid subscribers in the third quarter of fiscal 2020. Since India’s population is over 1.3 billion, there is still a lot of room for growth in its home market.
Visa’s partnership with its more attractive rates could accelerate subscriber growth, which would be good for Eros International.
However, investors may simply reward the shares of Eros International due to the profit reports of other media companies. Both ViacomCBS and Fox Corporation traded higher this week after beating Wall Street profit forecasts. When several companies in the same sector report encouraging results, this can sometimes change the point of view of investors, which raises all the related actions.
While it is not uncommon to see related tickers increase, this is not relevant for long term investors. After all, the results of each business will be distinct. That said, examining competitor results can be helpful in understanding business and consumer trends.
The best news for Eros International investors is the Visa partnership. The financial terms of the agreement were not specified. But it could potentially reduce customer acquisition costs for Eros Now and spur subscriber growth. Both factors would increase profitability, which is very relevant when you buy and keep for the long term.