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Cineworld files for bankruptcy, AMC CEO praises retail investors

Yahoo Finance Live anchors discuss the latest news in the movie theater industry after Regal Cinemas parent company Cineworld filed for bankruptcy in the U.S.

Video Transcript

RACHELLE AKUFFO: Regal Cinemas parent company Cineworld filing for Chapter 11 bankruptcy. Now, in its announcement, the company says it does have a roughly $1.94 billion loan to carry it through the restructuring process. The theater chain owner says it hopes to emerge from Chapter 11 in the first quarter of 2023.

That's after it completes a, quote, "real estate optimization strategy" in hopes of garnering more favorable lease terms. Now, Adam Aron, the CEO of rival AMC, took to Twitter to comment, celebrating his stock's meme status, writing, "Cineworld/Regal just filed for Chapter 11 bankruptcy protection for its theaters in the US and UK. Fortunately, AMC is in a very, very different situation-- because retail investors embraced us and lets us raise boatloads of cash. Thank you to retail! You really did save AMC."

And if you look at AMC and APE shares, trading in positive territory there. Both of them, as you see, they're up about a quarter of a percent for AMC and APE about 0.1%. But you know, don't want to always be too gleeful if you're a meme stock. You've got to be careful.

- That is very true. An important lesson here for so many of those retail investors.