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Cineworld: Bear Case Could Quite Easily Become The Base Case

Apr. 04, 2022 7:22 PM ETCineworld Group plc (CNNWQ), CNWGQ6 Comments
JP Research profile picture
JP Research
4.33K Followers

Summary

  • Cineworld's outlook may have improved as the Omicron surge fades, but it is certainly not out of the woods.
  • In addition to its high debt load, the company is also facing massive potential liabilities from its failed Cineplex deal.
  • The equity has been surprisingly resilient thus far but could see further downside given the significant funding risks.
Cineworld Cinema in South Ruislip, London, England closed during the COVID-19 pandemic - 047

Chaz Bharj/iStock Editorial via Getty Images

Cineworld (CNNWF) operates in an industry currently in a COVID-accelerated structural decline amid a shift toward Premium Video on Demand and shorter theatrical windows. Compounding its troubles is the massive (on balance sheet) debt load Cineworld will need to address at a time when cinema

This article was written by

JP Research profile picture
4.33K Followers
A passionately curious analyst.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (6)

k
Bankruptcy confirmed. Congrats to you brave shorts!

seekingalpha.com/...
k
Worth reading to understand the company DNA. Makes me want to put on a short...

www.calcalistech.com/...
Jacobin777 profile picture
@katieliu76 You should've - it was a good call!
k
This could end really well or really badly if you're short. Would be surprising if anyone picks this up now. Best option: file for bankruptcy, let PE pick up the pieces
M
Well done..
M
Cine is going bust no doubt, Not a secret here in the UK. Only question is when or who comes in to bail 'em out.
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