Is it really that simple?

There was an article on BBC (about 7 minutes ago). It gives us ‘Cineworld confirms it is considering bankruptcy’ (at https://www.bbc.com/news/business-62629932) there we see “Cineworld had hoped blockbusters such as the latest Bond film, Top Gun: Maverick and Thor: Love And Thunder would draw audiences back in after lockdown restrictions eased. But it recently said post-Covid customers levels were still lower than expected and blamed “limited” film releases.” I have an issue with that statement. I only saw one of the three (the Thor movie). The issue I have is with “customers levels were still lower than expected and blamed “limited” film releases” I do not think that is the case, and whomever makes that claim is massively shortsighted. Groceries and the cost of living is up EVERYWHERE. Meat alone is for me 25%-30% more expensive several other options are also more expensive, because the home brands are not available, setting us back around 10% per item. Electricity and fuel are up by a lot. These elements are central in the option to NOT go see a movie and there is another setting. It is seen in “Cineworld currently has a market value of around $69m but is carrying close to $5bn of debt.” Can anyone explain how a firm gets to have a debt 7200% of its value? There might be a real answer and this shows that I know next to nothing on cinema’s, but to have a debt 72 times the total value of a company comes across as slightly weird. In addition we see “But at just over 4 pence, the share price is still a long way off from where it was at the start of 2020 (220 pence) before the pandemic struck.” Implying that the company is now at a mere 1.8% of its original value and we see the blame on “limited film release” I think that business reporter Noor Nanji owes us a more (or better) explanation than we are seeing now. The issue all over the field makes little to no sense. It could be that there is a perfectly valid reason, but I can’t see it and that is because I am not in the cinema realm. But I reckon that Noor Nanji can give us a more perfect setting on what is going on. Because a firm in such a situation is not considering bankruptcy, it was utterly broke and broken months ago. 

I am not taking pleasure here. I love cinema’s, but there is a larger sense of weirdness when we look at these facts and a lot more questions should be out in the open. 

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Filed under Finance, Media, movies

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