Cineworld share price has been in a strong bearish trend as the company’s collapse continues. CINE shares closed at 2.76p on Friday, which was the lowest level since September 1. It has crashed by more than 99.2% from its all-time high of 317p. So, can Cineworld be saved?
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What next for Cineworld?
Cineworld has been on its deathbed for months. The highly-indebted company has been struggling since the Covid pandemic forced it to close its stores. As a result, the firm continued burning millions of dollars every month. Cineworld then turned to the debt market to fund its existence.
Now, with interest rates surging, the company has struggled paying its debt. At the same time, the firm has less than 4 million pounds, which is substantially less than what it needs to stay afloat. This situation improved after a judge granted it access to $785 million worth of liquidity.
It is also burdened by more than 6 billion worth of debt and a major lawsuit. Cinemark is seeking over $1 billion worth of damages from Cineworld.
Therefore, analysts believe that it will be difficult for Cineworld to be saved. For one, its business is actually struggling as customers stay away from movie theatres. The number of blockbuster movies has declined as companies like Paramount and Disney focus on their streaming products. In the long-run, the end outcome will be a situation where its assets are auctioned.
Cineworld share price forecast
The daily chart shows that CINE share price has been in a strong bearish trend in the past few weeks. This decline saw it collapse below the important support level at 16.72p, which was the lowest level on July 13. As expected, the stock has crashed below all moving averages. Its attempt to recover found a strong resistance at 6.70p.
Therefore, the stock will likely continue falling as sellers target the next key support level at 1.85p. A move above the resistance level at 3.50p will invalidate the bearish view.