Grandstand Limited — financial distress indicators
Financial-health summary
Grandstand Limited's reported numbers place it in the 'Watch' financial-health band (distress score 47/100). The main indicators are market-implied default probability >20%, material debt with no ebitda and share price down >80% from 52-week high. Independently, the Ohlson accounting model puts its 1-year failure probability at 84% and the market-implied (Merton) default probability is 76.7%. In its favour: operating cash flow is positive over the latest 12 months.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Merton distance-to-default -0.73 σ → PD 77%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Debt is 41% of assets while EBITDA is not positive.
With no operating earnings, repayment depends entirely on asset sales or fresh capital.
Price is -82% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
O-score 1.65 → model probability 84%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
0 severe and 1 moderate distress-related headlines in the last 6 months.
Headlines are corroborating evidence only; they are weighted lightly and never drive a flag alone.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- Revenue still growing (+30% YoY).
- High insider/promoter ownership (40%) aligns management with survival.
📰 Recent news scan
- restructurGrandstand (GRSD) Q2 2026 Earnings Call TranscriptYahoo Finance · 2026-08-20
- Grandstand Limited (GRSD) Reports Q2 Loss, Beats Revenue EstimatesYahoo Finance · 2026-08-13
- Gambling.com Group Is Now GrandstandYahoo Finance · 2026-07-22
- Gambling.com Group (GAMB) Stock Draws Fresh Price Target Split After Guidance CutYahoo Finance · 2026-06-23
- How The Narrative Around Gambling.com Group (GAMB) Is Shifting With Lower Targets And GuidanceYahoo Finance · 2026-05-25
- Results: Gambling.com Group Limited Delivered A Surprise Loss And Now Analysts Have New ForecastsYahoo Finance · 2026-05-16
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do Grandstand Limited's financial-health indicators show?
As of 2026-10-08, Grandstand Limited's public financial data places it in the 'Watch' band with a distress score of 47/100, driven by market-implied default probability >20%, material debt with no ebitda and share price down >80% from 52-week high. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is Grandstand Limited's financial distress score?
47/100 ('Watch'). Ohlson O-score 1.65 (model 1-year failure probability 84%). Merton distance-to-default -0.73 σ (model default probability 76.7%).
What works in Grandstand Limited's favour?
Operating cash flow is positive over the latest 12 months. Revenue still growing (+30% YoY). High insider/promoter ownership (40%) aligns management with survival.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
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Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.