We recently published
December Disappointments: 10 Big Names Troubled Early. Cinemark Holdings Inc. (NYSE:CNK) is one of the worst performers of last week.
Cinemark capped off the first trading week of December losing 19.8 percent, as investors dumped their positions amid concerns about the impact of Netflix Inc.’s acquisition of Warner Bros Discovery Inc. (WBD) on the theatre industry.
Cinemark Holdings Inc. (NYSE:CNK) fell alongside its counterparts, namely IMAX, AMC Theatres, and The Marcus Corporation, after Netflix announced on Friday that it officially inked a merger deal with WBD for an enterprise value of $82.7 billion.
The acquisition would include its control of WBD’s content libraries, boosting the Netflix platform assets, but raising fears that it could hurt cinema companies’ profit margins.
Additionally, sentiment was dampened by Netflix co-CEO Ted Sarandos’ announcement earlier that WBD movies will continue to get a theatrical release, but underscored that “windows will evolve.”
The Directors Guild of America expressed its concern about the acquisition and said that it would meet with Netflix to address their issues.
Sentiment was further supported by the company’s disappointing earnings performance in the third quarter of the year, during which Cinemark Holdings Inc. (NYSE:CNK) slashed its attributable net income by 73.6 percent to $49.5 million from $187.8 million in the same period last year.
Total revenues also declined by 7 percent to $857.5 million from $921.8 million year-on-year, amid lower revenues from admissions and concessions.
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