Persistent LossesRepeated negative EBIT and net income erode retained earnings and limit reinvestment capacity. Over months this undermines operational sustainability, deters lenders and partners, and forces reliance on dilutive equity or costly financing rather than internally generated funds to support operations or growth.
Negative Shareholders' EquityNegative equity is a structural solvency signal that constrains borrowing, raises counterparty concerns, and limits strategic options. It increases the likelihood of creditor-driven restructurings and reduces negotiating power in supplier, advertiser, or partner agreements over the coming quarters.
Negative Operating & Free Cash FlowSustained negative operating and free cash flow means the business cannot self-fund operations or investments. Structurally this forces continual reliance on external capital, increases liquidity risk, and makes maintaining programming, distribution, or sales efforts difficult without material financing or asset sales.