Cineworld (LON: CINE) share price has become the biggest talk on the UK trading floors as the company is heading toward a UK administration. The move is part of its restructuring process, which is set to wipe out the shareholders in order to support the creditors.
The situation is very depressing for the long-term holders of the Cineworld stock. On Monday, Cineworld shares were trading 6% higher till press time with massive volatility swings. It is quite possible that the price action could’ve reversed by the time you read this article.
What Is Happening With Cineworld?
A lot of drama has unfolded since the second-largest Cinema operator in the world filed for its bankruptcy in 2022. This triggered a sell-off in the shares, which had already been in a tailspin due to the lasting effects of the lockdown. Cineworld Group plc then started to look for relevant buyers for its UK & US businesses.
However, the Regal owner failed to bag any all-cash offer for its major businesses and came up with a restructuring plan after a deal with its creditors. During this whole process, Cineworld share price remained highly volatile, as evident from the following chart. As a part of this restructuring plan, the existing shareholders are expected to be completely wiped out.
Cineworld Share Price Shows A Delisting Is Imminent
Last week, Cineworld disclosed its intentions to file for administration in the UK. The move is a part of its restructuring process which will also result in the delisting of its stock. LON: CINE has plummeted more than 70% in the past 2 weeks as the shareholders take their losses ahead of a potential delisting. It is needless to say that the Cineworld share price forecast is quite bearish.
While the company undergoes the restructuring process, Cineworld Cinema sites are expected to remain operational as usual. The troubled theatre operator may give a part of its future equity to its creditors. However, the current shareholders may be left with nothing in their hands once the trading gets suspended.
Don’t let Cineworld share price action disappoint you as there are still plenty of good plays in the market. I keep mentioning such opportunities on my Twitter where you are welcome to follow me.
