Cineworld Share Price Forecast as Existential Threats Emerge

The Cineworld share price has gone nowhere in the past few days as existential threats about the company emerge. The CINE stock is trading at 35.35p, which is close to the year-to-date low of 26.96p. It has crashed by more than 71% from its highest level in 2021. The same downward trend has happened among other cinema companies like Cinemark and AMC.

LON: CINE latest news

Cineworld is a leading company that owns several movies theatre brands like Regal Entertainment. It acquired Regal in a deal valued at over $3.6 billion in a bid to compete with American giants like AMC. This acquisition has turned sour considering that the combined company is now valued at just 481 million pounds. At the same time, the company made a buyout offer for Cineplex for billions. 

After cancelling the purchase, Cineplex sued the company seeking over $1.2 billion. In December, a judge awarded Cineplex $1.2 billion, leading to an appeal by Cineworld. The appeal is still going on, and there is uncertainty about ending it. If the judge rules against Cineworld, it could lead to an automatic bankruptcy considering that the company does not have that liquidity. In a recent statement, the management said: “I think that we can say quite confident that we strongly believe that the Supreme Court or the High Court there in front of three judges will reverse the decision.”

The company hopes that the upcoming roster of movies will push more people to its halls. Some of the top movies that are expected to come out this year are Black Panther and Avatar. These are some of the highest-grossing movies of all time. But still, there is a possibility that more movies will continue being pushed in apps like Disney+ and Paramount.

Cineworld share price forecast

The daily chart shows that the CINE share price has been in a strong bearish trend in the past few months. Recently, however, the bearish momentum has almost faded as investors reflect on the recent results. The short and long-term moving averages have flattened while the MACD and RSI are at their neutral levels. Therefore, a bearish breakout cannot be ruled out. If this happens, the shares will likely drop to a low of 25p. This view will be invalidated if the shares move above 40p.