Global Eagle Entertainment Inc. (NASDAQ:ENT)
Shares of Global Eagle Entertainment Inc. (NASDAQ:ENT) fell 11.11%, after rating agency Moody’s withdrew the company’s ratings. The firm in a press release cited a lack of insufficient or otherwise inadequate information, needed to support the maintenance of ratings.
ENT Investors Reaction
Investors reacted to the news by pushing the stock to a new all-time low. Global Eagle Entertainment Inc. (NASDAQ:ENT) stock continues to trade in a strong downtrend and is down over 60%.
Declining investor confidence on the stock follows disappointing fourth quarter and full year financial results for FY2016. For the fourth quarter, Global Eagle Entertainment generated a net loss of (-$91.7) million. Net loss for the full year came in at (-$112.9) million.
EBITDA was up 24.9% in the fourth quarter to come in at $19.4 million. Global Eagle Entertainment attributes the increase to contributions from the EMC acquisition and growth in the Aviation connectivity business. However, it was partially offset by losses in the content services business.
Year-over-year revenue growth of 45.5% helped offset investor concerns about the wider than expected net loss. Global Eagle Entertainment Inc. (NASDAQ:ENT) posted revenue of $165 million for the fourth quarter. Full-year revenue was up 26.2% to come in at $538 million. Connectivity revenue was up 175% to come in at $88.4 million in the fourth quarter. Content revenue, on the other hand, dropped 5.8% to come in at $76.4 million.
Growth in revenue was mostly driven by the acquisition of Emerging Market Communications and continued growth of the Aviation Connectivity business. According to Chief Executive Officer, Jeff Leddy, 2017 has been a transition year for the company.
“2017 has been a year of transition for Global Eagle Entertainment Inc. (NASDAQ:ENT), and we are building a solid foundation to position our company for future growth. Importantly, we have strengthened key areas in our finance and other shared service functions and continue to integrate past acquisitions across our business lines,” said Mr. Leddy.
Global Eagle Entertainment Inc. (NASDAQ:ENT) is currently focused on strengthening its pool of talent which it expects to accelerate growth in the Content and Connectivity businesses. The company has also started to implement new software tools with a view to enhancing operations and improving the timeliness of financial reporting.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.