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.