Chicken Soup for the Soul shares dive 15%, Redbox owner eyes ‘strategic opportunities’

William J. Rouhana Jr

Chicken Soup for the Soul Entertainment (CSSE) shares have plummeted more than 15% after the US-based producer, distributor and AVOD operator admitted it was evaluating its “strategic opportunities” to provide it with a more secure financial footing.

CSSE took control of DVD rental company Redbox last year for $375m and Wall Street had expected it to report revenues of around $120m, a large uptick on the $38m brought in this time last year but adjusted because of the Redbox acquisition.

However, revenues fell well short at just under $80m and losses increased from $21m last year to $44m. That pushed shares lower to around 86 cents in aftermarket trading, down from $42 in June 2021 and around $12 this time last year.

In a call with analysts, CEO Bill Rouhana and CFO Jason Meier confirmed the company would be forming a committee of independent board members to explore “an increased level of strategic opportunities”, with the exec pointing to “incoming requests from financial and strategic partners”.

Rouhana also highlighted the increasing value of CSSE’s catalogue of films and series – which holds around 40,000-plus titles – against the backdrop of the writers strike and a potential medium term decline in product available via US studios.

CSSE owns former Sony streamer Crackle, in addition to around 30,000 DVD rental kiosks around the US via Redbox, and picked up a majority stake in Indian prodco Locomotive Global in 2021.

That followed Chicken Soup’s acquisition of the TV and film assets of the David Ellender-led LA prodco and distribution outfit Sonar Entertainment in April 2021, and the subsequent launch of scripted division, Halcyon TV.

CSSE also operates hundreds of FAST channels and carries them on its Redbox Free Live TV service, recently striking a deal with AMC Networks to offer shows ranging from The Walking Dead to Portlandia.

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