Cineworld (CNNWF) has announced the temporary closure of all its theaters in the United States, United Kingdom and Ireland as a result of the delay of the major premieres planned between now and the end of the year, such as the latest installment of James Bond, due to the coronavirus pandemic.
This measure will affect 45,000 employees. The announcement has caused the collapse of Cineworld shares, which fell by 30% this morning on the London Stock Exchange.
The second largest chain of cinemas in the world, among whose brands is Regal cinemas, had already warned its shareholders that if it had to close its theaters again, as happened in the first wave of the pandemic, it would need more provisions. In the first half of the year it suffered losses of $ 1.64 billion.
The coronavirus pandemic has dealt a severe blow to movie theater chains and, in particular, to Cineworld, which has incurred an 87% drop on the stock market since 2020 began.
Theaters had to remain closed until they could reopen, with restrictions, in the summer. Now that a second wave of infections is becoming a reality, big production companies have decided to delay the most anticipated releases until 2021.
Source: Admiral Markets MetaTrader 5. Cineworld daily chart. Data range: from February 23, 2018, to Octobe 5, 2020. Prepared on October 5, 2020, at 12 noon. Keep in mind that past returns do not guarantee future returns.
As we see in the graph, the coronavirus pandemic has sunk Cineworld shares, although it had been in a downward trend over the past two years:
- It closed 2019 with a drop of 16.7%, mainly due to the rise of streaming platforms
- The year 2018 ended with a decrease of 0.97%
- 2017 ended 6.37% up
- 2016 finished 0.44% up
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