Home Finance Cineworld eyes Wall St money after rival AMC becomes meme stock

Cineworld eyes Wall St money after rival AMC becomes meme stock

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By Muvija M and Chris Peters

(Reuters) -Cineworld is considering a Wall Street listing for all or part of its business in an effort to bolster its finances which are under heavy pressure from the coronavirus pandemic.

A U.S. listing would give heavily indebted Cineworld access to the largest capital market in the world, where rival U.S. cinema group AMC this year became one of the so-called “meme stocks”, sending its shares skyrocketing.

Shares in Cineworld, which gets the bulk of its revenue from its Regal cinemas in the United States, jumped 8% by 0833 GMT on the FTSE midcap index.

“We believe this is quite an interesting consideration which could be supportive of valuation if we were to see similar support in Regal as was with AMC,” BofA analysts wrote.

The company, which had net debt of $8.44 billion as of the end of June, said cash burn was $271 million in the first six months of the year, while losses narrowed to $576.4 million from $1.64 billion last year thanks to tighter cost control.

Rival AMC, the world’s biggest cinema theatre group, has also reported a big quarterly loss, saying ticket sales were running at less than one-third of 2019 levels.

NEW RELEASES

People have flocked back to cinemas in the past few months to watch movies such as Marvel’s “Black Widow” and Paramount thriller “A Quiet Place 2”.

Cineworld boss Mooky Greidinger expressed confidence in a line-up of big releases ahead, including four new Marvel movies and Tom Cruise’s “Top Gun Maverick”, the new James Bond movie, “The Matrix 4” and science fiction film “Dune”.

All of Cineworld’s 787 sites were open as of June, with Greidinger saying ticket sales were now at more than 50% of pre-crisis levels, as the United States and the UK eased months of pandemic curbs after vaccination drives picked up pace.

But concerns over new variants of the virus and an accelerated shift by studios to release movies simultaneously on streaming platforms are still a cause for concern.

Cineworld said it was expecting the window for movie releases in theatres to stabilise to somewhere between 20 and 60 days by next year.

“One of the most significant things that we all learned from the short window is that it creates an opportunity for high-quality pirated copies which is going all over the world,” Greidinger said.

(Reporting by Muvija M and Chris Peters in Bengaluru; Editing by Subhranshu Sahu, Susan Fenton, Anil D’Silva and Jane Merriman)

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