I still cannot see the case for owning shares in a cinema chain, any cinema chain but Cineworld (CINE) has its own additional problems and the debt markets are telling you that thy are going to come home to roost very soon.
Cineworld (CINE) is drowning in more than $8 billion of net debt. Its net assets at the half year were just $1.2 billion and if you strip out intangibles that number falls to MINUS $4.3 billion. With cinemas around the world either shuttered or likely to reopen to much smaller audiences, what to do? Yup…take on more debt.
Tom noted in yesterday’s bearcast the latest from Cineworld Group (CINE) and the shares set for a Monday crash – and they are more than 40% lower, below 25p, with a “Temporary suspension of US & UK cinema operations” announcement...
Remember how the PR spinners for Cineworld (CINE) conspired with the corrupt deadwood press to suggest that stakebuilding by a Chinese investor meant this company was a bid target? Anyone who bought into that tosh will today be regretting it as interims show that this company is a zero.
Every death is, of course, something we must lament but you need to put things into perspective. As such, a survey last week carried out in several countries made fascinating reading. Folks were asked what percentage of the population in their country had died of Covid.
Drowning in debt Cineworld (CINE) was in a hole when Covid struck. It had agreed the $2.1 billion purchase of the Canadian chain but with all of Cineplex’s theatres going darker than Justin Trudeau’s face on party night, thanks to the shutdown, and with Cineworld’s existing 787 theatres also shuttered, going ahead would have been financial suicide.
Early this year we showed the top shorted London-listed shares at the start of 2020. How's the performance as at the end of June? (those in bold remain from 2019)...
A new week...but some matters do not change. First is perennial bad boy Amigo Holdings (AMGO), whose shares are down a further 25% on news that the company has 'continued to see a substantial increase in the rate of complaints'. Well there is a surprise...not!...
Regular readers will know my long-term negative view on Cineworld (CINE). Was it really December 2017 that I first penned some caution on the name?...Yes it was as you can read here. Even with the recent comedy bounce, the shares are still down two-thirds in value since then which is not too shabby. So what to think now?...
