The Cineworld share price cratered today after the company released relatively weak results. The CINE shares fell to 92.80p, which was 26% below the year-to-date high of 125p.
What happened: No one was expecting Cineworld’s results to dazzle considering that the company has shut down most of its outlets. In its report today, the firm said that it made a monster operating loss of more than $2.2 billion in 2020. That was the first time the movie theatre company had made a loss. In 2019, it had more than $724 million in annual profit. Its revenue dropped from $4.3 billion to more than $852 million.
The Cineworld share price has also dropped because of the recent rise in the number of coronavirus cases. Indeed, the UK government has hinted that the reopening could delay further to curb the spread. This could hurt the company, which also owns Regal Theatres in the United States. It plans to open US theaters in April this year. The CEO said:
“While short-term uncertainty remains, we have taken decisive actions to enable the Group to withstand the challenges presented… We are well positioned to recover and reopen our cinemas when restrictions are eased.”
The four-hour chart shows that the Cineworld share price is being hammered after its weak financial results. The stock is trading at 91.80, which is slightly above the rising black trendline that connects the lowest levels from January 25. Notably, the 15-day and 25-day moving averages have also made a bearish crossover.
In my view, the CINE remains in an overall bullish trend. This view will remain in place so long as the price is above the ascending trendline. If it drops below the line, we should not rule out another dip to 80p, which is about 10% below the current level.
