Cineworld Share Price Recovery Despite Financial Struggles

Cineworld’s share price continues to trade relatively stable despite being in a tough financial situation. In today’s trading session, the share price is down by a percentage point, extending a bearish streak that started three days ago.

In September, the world’s second-largest cinema chain company filed for bankruptcy protection in the US as it sought to restructure its operations following low audience numbers. During the time, the company expressed optimism that it expected to come out of bankruptcy by the first quarter of 2023 and would possibly be able to finance its almost $2 billion debt. 

By late October, the company had already started showing signs of recovery after reaching a settlement with landlords and lenders, which cleared its way to being able to borrow an additional $150 million and possibly make a $1 billion debt repayment. 

The settlement saw creditors’ and landlord’s opposition to the billion-dollar debt repayment plan after the company agreed to pay its due rent of $20 million. The agreement also allowed all parties involved to move forward, which has contributed positively to the continued success of the company.

Cineworld Share Price Forecast

The company’s settlement with its lenders saw its prices spike by 195 per cent in a single trading session on November 1. However, since then, the prices have either traded in a sideways trend or dropped in the markets. 

However, looking at the chart below, despite the recent drop, the prices have performed exemplary well for a company that filed for bankruptcy less than two months ago. Although I do not expect Cineworld to have another price surge, I still see it as a potential buy.

There is a high likelihood that we might see the company trading above the 8p price level again in the coming trading sessions. However, a drop below the 3.5 price level will invalidate my bullish analysis.

Cineworld Daily Chart

Cineworld share price