Cineworld shares plunge amid bankruptcy fears
Shares in Cineworld have plummeted in recent weeks as fears of bankruptcy for the world’s second-largest cinema chain continue to circulate.
The company is currently in $5 billion worth of debt and further struggles to dimmish that figure since the pandemic have resulted in a share price plummet of more than 60% in recent weeks.
Cineworld has cited that one of the key factors behind the debt is the elongated effect the pandemic has had on delaying film releases, thus, with fewer productions to choose from attendances have been lower than expected.
The extent of the debt, however, is worrying, and investors fear that even when the film industry is firing on full cylinders it will be difficult to shift. This was further exacerbated when The Wall Street Journal reported that bankruptcy might be imminent.
Cineworld has since commented: “Despite a gradual recovery of demand since reopening in April 2021, recent admission levels have been below expectations.”
Continuing: “These lower levels of admissions are due to a limited film slate that is anticipated to continue until November 2022 and are expected to negatively impact trading and the group’s liquidity position in the near term.”
With over 750 cinemas in 10 different countries, the potential closure would have huge ramifications not only for the moviegoing public, but also the entertainment economy. Whether it’s rising ticket prices or some other miracle income booster, the firm needs to act quickly if it is to survive the bust.
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