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Cineworld Group plc CINE is a risky play be careful

Cineworld Group plc CINE is a risky play be careful

Cineworld Group plc CINE is a risky play be careful

With huge debts, a lost court case, owing rents and down on ticket sales can Cineworld make a recovery?

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The CINE share price closed 5.54p up 23% on the day 02 September 2022.

The Cineworld share price had reached a 6.80p high early into trading before giving a lot back.

Clearly there are a mix of profit takers and nervous investors.

It has been reported that some big investors had pulled out dumping the stock.

With bankruptcy an option it may well be the only option.

To recover from this near liquidated state, Cineworld would need to overcome the their huge debts with the lost court case which would increase their debts.

Things are not looking good and the debts Cineworld owe is a lot of money to find in order to save the business.

Whilst the share seem cheap and had recovered from just below 2p, I’m not certain that the share price can recover moving forward save being pumped by inexperienced investors hoping to get rich quick.

Sometimes in these situations no news from struggling companies is a bad sign. If Cineworld had real recovery options I think we would have heard news by new.

If the company goes under share dealing will be suspended and it’s likely that you stand to lose all of your investment.

On the other hand it’s a gamble for short-sellers at this stage too.

But the CINE share price could shoot up to 10p or even more, but I’m fitting on the fence leaning more on the side of a complete crash or suspension.

Cineworld is a risky play and I would be worried holding a position in this stock at this stage.

It’s more likely that investors will lose all their money and a big player will pick up cheap assets less debts and reopen some of the cinema locations under a different name.

I can’t see the Cineworld name surviving and in my mind this is a blockbuster situation where the online digital wins again and the high street suffers.

Post Covid-19 Cineworld did not raise enough cash to convince shareholders that they could pay off their debts to survive. And Cineworld could not restructure their debt plan.

As well as all of the above woes, the cost of keeping the lights on, the air con on is increasing in the UK and the US and other locations.

To cover increasing costs, Cineworld would need to increase ticket prices.

But because of the cost of living crisis households; families cannot afford the luxury of watching films and movies in cinemas.

It’s going to be a testing Winter 2022/3 and things are not looking good moving into the Spring 2023.

The clever money got out of CINE at 20p pre crash in my view.

I think the writing was on the wall for Cineworld when the share price fell below 60p and it’s clear that wise investors called it a day then.

The short-sellers made a mint from the Cineworld crash and all the signs that the show was coming to an end was clear to see.

It was a good risky move to have bought in at 2p and sell at 6p a x3 bagger. But now that wave is over, the repeat is very risky since a suspended stock means you stand to lose all of your investment.

I do not see any positive signs that any big players will save Cineworld in the way those new to investing in stocks may think things could play out.

For this reason I’m steering clear of Cineworld and going to chew on my sweet and sour popcorn from the side-lines.

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