Cineworld stock sinks, unveils restructuring agreement with lenders

Yahoo Finance Live’s Jared Blikre breaks down the decline in stock for Cineworld.

Video transcript

- Break out the popcorn, guys. Cineworld and certain of its subsidiaries entering into a restructuring support agreement with lenders as it exits, basically, the equivalent of bankruptcy chapter 13, and you can see the shares are down 35%, basically 35% there.

If we look at the Wi-Fi Interactive, I can show you a chart here. And this is going to go back. Let's see, let's take a look at the one-year chart. Already down 94%. Not a huge surprise. Basically, this has been a penny stock for at least six months that we're looking at here. Is this going to move the needle on Cineworld? Looks like lender is going to provide basically a $1.5 billion of new debt filing financing, and then Cineworld is going to raise $800 million through a fully-backstopped equity offering.

And here is the net result. You can see the share price is on your screen there. And just in the general, I'm going to put a year-to-date with this heatmap, and you can see there's some huge-- we've got some winners here and a couple of losers. And the winners largely in the US, and the not winners, well, it's Cineworld and looks like also National Cinemedia as well.

- Yeah. Really interesting to see some of the movie and entertainment companies this morning, especially considering the fact that for Cineworld, this was a company that was looking at selling its business. So it's now terminating, effectively, those efforts to sell its US, its UK, its Irish businesses as well here.

Even as we were thinking back to some of our conversations with AMC CEO, Adam Aron, they had talked about-- talked to "Yahoo Finance" last year about the opportunity to potentially buy up some distressed theater chains at bargain basement prices. And Cineworld certainly was within that conversation, or at least that line of thinking around it.

I was taking a look at AMC shares. AMC had since kind of stepped off of looking through those opportunities, or at least deploying cash or capital in that direction in terms of acquiring some of those distressed movie theater operators, or even individual locations, but hard not to take a look at AMC shares, even this morning in reaction to this news, considering now what's in the world is going to continue to go through to try and save its business. AMC shares, they're up by about 1.1% on this. It was a big weekend at the box office for me personally. Went to go see "Dungeons And Dragons," and so that's a boost for AMC I guess at the end of the day.

- Good for you and them as well.