The movie industry is still recovering from the pandemic, but nearly fast enough to be of any help to Cineworld.
According to a new report from The Wall Street Journal, Cineworld – the operators of the Regal Cinemas chain in the U.S. – are preparing to file for chapter 11 bankruptcy in the U.S. and insolvency in the U.K.
The company flirted with insolvency in Nov. 2020, but eventually found a funding source that would take it through Spring 2021. As the world began to return to movie theaters, the chain was hopeful of recovery, but then was hit again by customers not returning as fast as had been hoped, and then the studios haven’t had as much product as was hoped due to backlogged effects houses.
Currently, Cineworld is said to be exploring ways to cut costs including selling off assets and restructuring its debt.
Cineworld Chief Executive Mooky Greidinger told The Wall Street Journal, that the company hadn’t had the same benefits as the AMC stock being salvaged by investors from Reddit. “I think what happened to them is a very good thing for AMC. And you know, we are traded in the U.K. market. Not every stock in the U.S. market is a meme stock. And I think that AMC did well with it,” he said. “They handled the situation in a good way. And I think that investors will see the conduct of the industry and will see the way we are performing, and we will see this in our share price. Are we going to become a meme stock? I don’t think so.”
“There are pluses and minuses in every thing in life. I will not give you a straight answer. Of course I would love my shares to be much higher than they are today. But you know, in everything like this there is also an element of risk,” Greidinger said. “I am happy for AMC that they are doing well. At the end of the day, with all of the competition in the industry, I don’t think that any industry wants to see one of the huge players of the industry falling down. This isn’t positive news for anyone.”
There are a lot of companies with interests in keeping Cineworld in business, it’s just a question of if they can work out some form of plan.