Ebix (NASDAQ:EBIX) shares plummeted by over 50% in the early session today after multiple media reports suggested that the on-demand software and eCommerce services provider has filed for Chapter 11 bankruptcy in a North Texas court.
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According to Bloomberg, the company filed for bankruptcy protection after defaulting on a $617 million loan. Reportedly, multiple subsidiaries of the company have also filed for bankruptcy. The case is set for a hearing tomorrow.
Ebix, helmed by Robin Raina, operates a financial transactions and remittances firm in India. Earlier, lenders had threatened to drag the company into bankruptcy proceedings if it failed to clear dues by December 17. Today’s mega value erosion in the company’s shares follows a nearly 26% price gain over the past month. Last month, Ebix reported a net loss per share of $0.11 on revenue of $119.2 million for the third quarter.
Is EBIX a Good Stock to Buy?
While Ebix’s top line steadily ticked higher from ~$498 million in 2018 to just a little over $1 billion last year, its net income contracted from $93.1 million to $64.6 million during this period. The company has generated a net income of $4.9 million over the past four quarters. In sync, Ebix’s share price dropped from its $60 highs in February 2019 to $4.93 on December 16. It is already down to $2.47 at the time of writing.
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