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Eros shares are taking a wild ride on two continents as the “Netflix of India” faces questions about its financials

By Madhura Karnik

This post has been updated.

Eros International Media, one of Bollywood’s biggest production companies, is having a hard time explaining some of its financial numbers—and its shares got clobbered today (Oct. 26) in India.

The company’s stock plunged 19% on the Bombay Stock Exchange today.

But shares of Eros’ holding company, the New York Stock Exchange-listed Eros International Plc, snapped back from their 17% drop on Oct. 23. In New York, the US-listed shares closed 17% higher on the day, at $17.12, just 85 cents below the Oct. 23 opening price.

The see-sawing started after a stock analyst at Wells Fargo raised questions last week about Eros’ revenue and its Netflix-like digital platform, and cut his rating on the NYSE-listed shares.

The Wells Fargo move was preceded by a series of tweets from a Twitter account by the name of Market Farce, which describes itself as being “(f)ocused on uncovering farcical, fraudulent and dishonest financial market activity.” In a series of tweets spread through last week, it raised doubts about Eros’ revenue reporting and operations.

It also questioned the firm’s revenue figures in the UAE, where Eros says annual revenue more than doubled in the past fiscal year to $103.8 million.

“We are not going to comment on an unknown person who hides behind an alias on social media to make ridiculous and outrageous accusations,” Whit Clay, an outside spokesman for Eros, told Bloomberg.

But Eros held a conference call on Oct. 23 to help clear up investors’ concerns—after which Eric Katz, the Wells Fargo analyst, was dissatisfied enough to lower his rating on the NYSE-listed stock, according to Bloomberg.

One concern of Katz’s involves the reported number of users on ErosNow—a film and music streaming service that Eros says had crossed the 30 million-user mark as of Sept. 30. From Bloomberg’s story:

“We’re still feeling uncertain about the ErosNow user count,” Katz wrote. “Public websites that track app downloads (i.e. App Annie) show relatively low rankings for ErosNow vs. other Indian streaming services with lower user counts. We can’t reconcile the disparity and it’s a red flag for investors.”

In a statement dated Oct. 26, Eros said it ”would like to confirm that nothing has materially changed to the strong business fundamentals” of the company. “We have significantly grown the business over the last decade and continue to be market leaders in the Indian film industry with a dominant market share of the global Indian box office.”

Eros, headed by producer Kishore Lulla, has been hailed as the content king of Bollywood. Founded by Lulla’s father, Arjan, in 1977, the company has a library of more than 3,000 films and distributes content in more than 50 countries.

In November 2012, it launched ErosNow, which provides on-demand entertainment and is valued at around $800 million.

The group’s digital expansion has invited comparisons to Netflix and attracted the interest of several marquee global investors, including Fullerton Global and Temasek.

But what it’s inviting now, mainly, is scrutiny.

(Update: This post has been updated with the Oct. 26 closing price for Eros’ NYSE-listed shares.)