Shares in Cineworld (CINE), the world’s second largest cinema chain, have tumbled over 8.5% to 48.5p after it emerged the company has delayed opening its US theatres until mid-August.
The company is yet to make an announcement to the stock market, but chief executive Mooky Greidinger told the Financial Times yesterday that the US reopening would likely be pushed back to 7 or 14 August.
Greidinger said, ‘It might take a little more time, we might start a little slower, but at the end of the day I believe the world will become a normal place again. If it’s going to take another two weeks or another three weeks, this is really not so much the point. We have to be optimistic.’
Its UK cinemas are scheduled to reopen on 31 July for now.
DISNEY DELAYS MULAN, STAR WARS AND AVATAR
The stateside delay comes as entertainment giant Disney made significant changes to the release of some of its blockbusters, dealing a major blow to cinema operators.
Disney has delayed the release of its live-action Mulan remake ‘indefinitely’ and pushed back the release of its new Star Wars and Avatar films by a year.
According to exchange-traded fund (ETF) provider GraniteShares, Cineworld is one of the most shorted shares in the UK stock market, with 7.5% of the company’s stock currently shorted.
The company has had a tough time in the last few months, having had to grapple with high debt and the closure of its entire 787 cinema estate during worldwide lockdowns amid the coronavirus pandemic.
$2.1 BILLION CINEPLEX ROW
Last month, it pulled out of buying Canadian cinema chain Cineplex in a $2.1 billion takeover deal struck before the pandemic, sparking a legal row.
Following the withdrawal of the Cineplex deal, analysts at Jefferies estimated Cineworld’s cash burn would be around $40 million a month, effectively giving the company a ‘handful of extra months of liquidity’ beyond the end of 2020.
The original deal was expected to result in huge cost savings by integrating the two businesses with around $120 million of synergies forecast this year and a further $130 million by the end of 2021.
