CNWGY - Why Cineworld Plunged More Than 50% Today
Shares of U.K.-based Cineworld (OTC: CNWGY) (OTC: CNNW.F) plunged more than 50% on Friday following a similar plunge on Wednesday of this week.
On Wednesday, Cineworld released a statement to the London stock exchange, saying that its liquidity was now in question amid a disappointing moviegoing recovery and limited film slate in the second part of summer. Then on Friday, the Wall Street Journal reported the company, which is the second-largest theater company in the world and the owner of U.S.-based Regal Cinemas, was preparing to file for bankruptcy "within weeks."
While the pandemic was thought to have wiped out movie theater operators when it struck in early 2020, most theater chains survived by taking on debt and running down their cash over the past two years with the hope that a return to theaters would allow them to eventually pay back their loans. However, the U.K. reopening has been disappointing thus far, and it turns out the largest pandemic shock effects might have just been delayed until now.
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Why Cineworld Plunged More Than 50% Today