Cineworld Share Price Enters Oblivion – Here’s What Went Wrong
The Cineworld Cinema at Dolphin Square in Weston-super-Mare, UK
Cineworld (LON: CINE) shares are not trading on the London Stock Exchange anymore. The stock of the theatre chain operator has been suspended from the UK bourse as a part of the firm’s restructuring plan. As per the plan, the shares now stand canceled, and the holders have no claim on the company assets.
Although Cineworld has emerged out of bankruptcy and is now operating normally, its stock is not worth anything. This is because the assets of Cineworld plc have been transferred to a new holding company, which is controlled only by the lenders. This is because the lenders are paid first in case of a company’s bankruptcy.
Why Are Cineworld Shares Not Trading Anymore?
After trading for 17 years on the London Stock Exchange, Cineworld shares were suspended on 31st July 2023. This was a part of the firm’s restructuring process, which was approved by the court. The plan, which was made after an agreement with the creditors, included wiping off the existing shareholders.
This enabled the British cinema operator to release $4.54 billion of its debt. The company also raised $800 million via the right offering. An additional $1.71 billion was also raised through debt financing. These funds are supposed to steer the company through the tough times after its emergence from bankruptcy.
Cineworld Share Price Goes To Zero
A few days after the suspension of shares from the stock exchange, the shares were officially canceled. This was pretty much obvious once the firm filed for administration in July 2023. It was conveyed beforehand that the shares would be canceled after the appointment of the administrators.
The shareholders have no claim now on the company assets whatsoever due to the cancelation. Most of the people left holding Cineworld shares are the ones who tried to catch the falling knife after the company filed for bankruptcy last year.
Don’t let Cineworld share price action disappoint you, as there are still plenty of good setups in the market. I keep mentioning such opportunities on my Twitter, where you are welcome to follow me.