Cineworld faces a bleak future – investors should stay away

Weighed down by crippling debts and with consumers tightening their belts, Cineworld's future does not look bright, says Rupert Hargreaves. Investors should steer well clear.

Cineworld cinema
Cineworld needs customers to return in large numbers after the pandemic
(Image credit: © Iain Masterton/Alamy)

The best investors carefully analyse the probability of certain outcomes to establish the perfect price to pay for an asset. When it comes to the outlook for Cineworld (LSE: CINE) shares, I think the potential outcomes are pretty binary at this stage: either the company will fail, crushed under the weight of its debts, or it will manage to muddle through and just about survive.

This conclusion might seem harsh, but in my view, the group does not have a lot of options.

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Rupert Hargreaves
Contributor and former deputy digital editor of MoneyWeek

Rupert is the former deputy digital editor of MoneyWeek. He's an active investor and has always been fascinated by the world of business and investing. His style has been heavily influenced by US investors Warren Buffett and Philip Carret. He is always looking for high-quality growth opportunities trading at a reasonable price, preferring cash generative businesses with strong balance sheets over blue-sky growth stocks.

Rupert has written for many UK and international publications including the Motley Fool, Gurufocus and ValueWalk, aimed at a range of readers; from the first timers to experienced high-net-worth individuals. Rupert has also founded and managed several businesses, including the New York-based hedge fund newsletter, Hidden Value Stocks. He has written over 20 ebooks and appeared as an expert commentator on the BBC World Service.