CITY WHISPERS: Silver screen turns to gold for Cineworld’s vultures, who can be toasting extremely lucrative couple of weeks after betting against chain
Cineworld’s looming possible bankruptcy has sent its already weak share price plunging further in a significant blow to investors.
But those betting against the world’s second-largest cinema chain can be toasting an especially lucrative couple of weeks.
The corporate has long been a goal of short-sellers sceptical of its ability to bounce back from the pandemic while combating a mountain of debt.
Under pressure: Cineworld has long been a goal of short-sellers sceptical of its ability to bounce back from the pandemic while combating a mountain of debt
On August 16, according to S&P Global Market Intelligence data, about 15.1 per cent of its shares were classified as ‘on loan’ – a proxy for a brief position.
This was someday before it admitted it was facing financial issues.
On the time, the shorted shares were price £43.2million, but after the bankruptcy reports their value collapsed to £5.8million, a dive of 87 per cent and a horror show for normal investors.
Nevertheless, the short sellers have made a profit of £37.4million in a fortnight.
Restaurant Group could suffer from Cineworld demise
Speaking of Cineworld, let’s not forget the companies operating in its orbit that will suffer if it suddenly needed to shut a lot of sites.
The Restaurant Group, which owns Frankie & Benny’s, is considered one of those firms.
But investment bank Peel Hunt says it could still have a blockbuster performance.
Only around 135 of its 400 or so sites are next to cinemas.
The undeniable fact that there have been fewer moviegoers has not up to now hit TRG sales.
Perhaps they need to just start selling popcorn while they’re at it.
Being stock market darling not all glamour
Once you have grabbed everyone’s attention, the pressure is on to maintain the high performance coming, lest you be written off because the financial equivalent of a one-hit wonder, as quickly forgotten as a former reality show star.
So it’s for biotech firm Omega Diagnostics, whose impressive work throughout the pandemic saw its stock soar.
A failed fundraising earlier this yr and a delay to its full-year figures will thrust the AIM-quoted group into an unflattering highlight when it reports on Thursday.
Not less than there may be one consolation, with the firm saying earlier this month that it expected to reap more from a recent sale than it previously anticipated.
City grapevine says Johnson Matthey is cooking up deal
Liam Condon, the new-ish boss of the chemicals and metals giant best known for making catalytic converters, has up to now been a vocal advocate of the burgeoning hydrogen industry.
He has put his money where his mouth is up to now – but sources said it was not clear yet if any recent M&A can be on this sector and the corporate declined to comment.
Condon, an avid runner and polyglot, desperately wants the FTSE 100 firm to play a significant role in cleansing up the world’s emissions.
Whatever the subsequent deal is, it is going to almost definitely be at the very least one shade of green.
Contributor: Calum Muirhead