The Cineworld share price has been in a narrow range in the past few days as investors assess the impact of the upcoming blockbusters and the rising interest rates. The CINE stock is trading at 36.15p, which is about 38% above the lowest level this year. The stock is also reacting to the company’s risk of operating as a going concern.
Cineworld is one of the biggest movie theater companies in the world. As a result, the company is in a recovery mode as it expects more growth as the industry rebounds. It hopes that a series of upcoming blockbusters like Avatar and Black Panther will boost its fortunes this year. However, the company expects the going to be tough.
In a report on Thursday, the company said that its loss for 2021 was over 573 million pounds even as its revenue doubled. The loss was significantly narrower than the $3 billion it reported in 2020 as it was forced to close its theater chains. Most of its income came from James Bond’s No Time to Die movie.
The most important statement by the company was about its upcoming payments in June. The firm is expected to pay part of its debt in June. The CEO said that there are uncertainties about whether it will be able to honor those covenants. Therefore, with over $4.8 billion, the company will keep channeling most of its income to debt payments.
Cineworld’s management also denied doing anything wrong in canceling its acquisition of Cineplex. The latter has filed a case in Canada seeking $900 million in damages. That would be more than the company is currently worth. The company said: “In the event that Cineworld is unsuccessful on appeal, the group would not have sufficient liquidity to pay the existing level of damages awarded.”
The four-hour chart shows that the CINE share price has been in a narrow range in the past few months. As a result, the stock remains below the descending trendline shown in black. It has also moved to the 25-day and 50-day moving averages. Therefore, after finding substantial resistance, there is a likelihood that the stock will continue falling in the near term as investors watch the Cineplex case. If this happens, the next key support will be at 30p.
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