Fool de Motley2 Dec 2021 11:30
Why I worry for Cineworld’s share price
All that being said, I’m afraid I won’t be taking a risk on Cineworld shares any time soon. My main worry over this UK share is the huge amounts of debt it still carries on its balance sheet ($8.4bn worth as of June). This could prove fatal if Omicron (or indeed any other Covid-19 variation) forces its theatres to close. At best, it casts a shadow over the company’s ability to invest in its operations for future growth.
This is particularly concerning given the rising popularity of Netflix and other streaming platforms. These companies are investing billions every year in content and technology to win viewers from other media.
Cinema operators will have to also keep splashing the cash on an enormous level to remain relevant and keep pulling in the punters. I think Cineworld’s share price could remain weak and possibly plummet, even if it manages to survive the Covid-19 crisis.