Buying bankrupt companies can be a good idea if you know what you are doing. Those who invested in American Airlines $AAL in 2013, or Texaco in 1987 made a fortune. However, companies don't go bankrupt because they are doing great and you need to understand the risk.
There are two types of bankruptcies, Chapter 7 and Chapter 11. In Chapter 7, the company is liquidated while in Chapter 11, it goes through a debt restructuring.
The second largest movie theatre chain in the world after AMC $AMC , Cineworld $CINE.L said that they are considering a Chapter 11 Bankruptcy. Should you buy?
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