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Bankruptcy Plans Drive National Cinemedia Shares Higher

While bankruptcy might feel like a failure in progress, for businesses, it can be a good thing. Just ask National Cinemedia (NASDAQ:NCMI), who announced it was filing a Chapter 11 bankruptcy petition. That was enough to send shares on a terrific upward bounce, doubling and then some, ultimately closing up 114.6% in Wednesday’s trading.

National Cinemedia may not be immediately recognizable, but if you’ve been to the movies lately, you likely know what it does. It’s the United States’ largest seller of pre-movie ad space. The extended closure of theaters back during COVID-19 and the irregular, sluggish reopening seen since put National Cinemedia in a bad position. National Cinemedia, at the time of bankruptcy, had assets between $500 million and $1 billion. The problem was that it had liabilities estimated between $1 billion and $10 billion.

However, there are some signs of a comeback, especially if it can get out from under that debt load. National Cinemedia expects revenue growth of around 44.4% in the fourth quarter, ultimately reaching $91.7 million. Better yet, operating income should jump 130%, ultimately hitting $42.1 million. National Cinemedia filed for its bankruptcy back in September, notes a Deadline report, and approval is expected to hit in a matter of weeks from a Texas bankruptcy court.

Interestingly, looking at the last five days of NCMI stock trading shows a comparatively quiet graph until recent events. Shares were nearly flat on April 10 until share prices doubled going into April 11. Then, shares spent the entire day between $0.27 and $0.20 before spiking upward again. Over the course of the day, shares nearly tripled from yesterday’s close but eventually lost some ground throughout the session.

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Steve Anderson
Steven Anderson has written professionally for the last 15 years, and has written stock news and analysis for TipRanks since 2021. He holds a Bachelors of Business Administration from Western Michigan University. He has previously written for several financial publications, addressing stocks, banking products, macroeconomic conditions, commodities and more. Additionally, his work in technology and mobile payments allow him insight into multiple market verticals.