Are Del Rio, Eagle Pass theatres going under like Regal Cinema?

Woke up to the news Cineworld theatres is closing it’s two chains, Regal Cinema and Picture House. Regal Cinema has 536 theatres in the U.S. while Picture House is a United Kingdom based operation.

My first thought was is this the first domino in many theatre chains going down, including Del Rio’s Cinemark 8 and Eagle Pass’s  Cinemark Mall de Las Aguilas?

Quick research into the Cinemark chain, the third largest in the United States, showed several red flags indicating COVID could have another victim.

In February, Cinemark’s stock price was near $40, at $38.71. Today, it’s wallowing around $10.

This is a red flag for any company if its stock plummets to record lows.

Its ticket prices are at an all-time low. So, they’re stock is at rock bottom and their revenue stream is at an all-time low, two red flags.

Right now, Americans are much more comfortable watching Netflix than wandering into a movie theatre. The thought of crying babies in the theatre doesn’t bother people as much as the idea of someone sneezing or coughing can scare the daylights out of some! So, another problem for Cinemark., aka third red flag, is people aren’t really comfortable going to the movie theatre.

Another red flag is the company lost $60 million in the Spring Quarter. 

Not helping its cause is there are no good movies coming out right now. Major releases are being postponed, as studios want to maximize their releases. The latest addition to the James Bond series, Black Widow, Eternals, Wonder Woman and Top Gun are all being rolled back.

However, there’s more to this scenario than red flags. There is good news! 

Cinemark is positioned well with the lowest debt of any major theatre chain.

More good news, they have nearly half a billion dollars in the bank. Translation, they have lots of money and don’t owe many people, compared to other theatre chains.

Also stock analysts are recommending their stock (cnk) as a buy or at least hold.

Having said all this, we aren’t soothsayers and can’t predict exactly what’s going to happen during COVID times, nor business analysts. We did what anyone could do with Google. However, indications are that when it comes to movie theatres, Del Rio and Eagle Pass theatres  should be able to keep their heads above water for the time being.