Despite the fact that the broad market is at break-even this week, the shares of movie theatre companies are not. Since the close of trading on Friday, Cineworld Group (CINE.L) shares have declined by a large amount. What was the underlying cause of this very rapid fall in price? Let’s see if we can figure things out.
Given that around 80% of the company’s owners are individual shareholders, rather than institutional investors such as mutual funds or hedge funds, the possibility that half of this shareholder base will be hostile to the other half is fairly real. This perspective is bolstered by the fact that a large proportion of these owners are first-time investors who entered into their transactions based on advice provided on various online forums.
Although this company may well recover following a two-week sell-off, serious investors who prefer to purchase and hold are unable to participate. AMC remains purely speculative in nature, speculating on the degree to which share advocates will be able to affect the share’s price.
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Anthony Gonzales brings 3 years of experience in helping grassroots, mid-sized organizations and large institutions strengthen their management and resource generating capacities and effectively plan for the future. He is also a mentor and professional advisor to artists working in all disciplines. He is the gold medalist from St. Marco University of Science and Technology in the Bachelors of Financial Management as well.