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Chicken Soup for the Soul Stock Crashes Following Chapter 11 Bankruptcy Filing
ByAinvest
Monday, Jul 1, 2024 10:42 am ET1min read
Chicken Soup for the Soul Entertainment filed for bankruptcy, causing its shares to plunge by over 40%. This move affects the company known for its Redbox DVD rental kiosks. The market reacted swiftly, with investors recognizing the potential impact on the financial landscape.
Chicken Soup for the Soul Entertainment, the parent company of Redbox, filed for Chapter 11 bankruptcy protection on June 30, 2024 [1]. This filing, which listed debts of approximately $970 million and total assets of around $414 million, has sent shockwaves through the financial markets and affected the company's subsidiary, Redbox, known for its iconic red DVD rental kiosks [1].
Founded in 1993, Chicken Soup for the Soul originally gained popularity through its inspirational book series, which has sold over 500 million copies worldwide [1]. The company, which includes both the book publishing and entertainment divisions, has struggled to maintain profitability, leading to the recent bankruptcy filing.
In 2022, Chicken Soup for the Soul Entertainment acquired Redbox, a business that was founded in 2002 and recognized for its distinctive red DVD kiosks outside supermarkets and pharmacies [1]. With approximately 27,000 kiosks across the United States, Redbox is a significant contributor to Chicken Soup for the Soul Entertainment's revenue.
The bankruptcy filing has caused Redbox shares to plunge by over 40% [2]. The market reacted swiftly to this news, recognizing the potential impact on the financial landscape. Chicken Soup for the Soul Entertainment owes millions to entertainment and media companies, such as Universal Studios, Sony Pictures, and BBC Studios Americas, as well as retailers like Walgreens and Walmart [1].
The bankruptcy filing has also affected Chicken Soup for the Soul Entertainment's employees, who have not been paid for the two-week period ending on June 14, 2024 [1]. The company has approximately 1,000 full- and part-time workers.
It is not yet clear how the bankruptcy filing will impact the Redbox operation. Chicken Soup for the Soul Entertainment declined to comment on the situation as of Sunday [1].
References:
[1] Ruberg, S. (2024, June 30). Chicken Soup for the Soul Entertainment, Parent of Redbox, Files for Bankruptcy. The New York Times. https://www.nytimes.com/2024/06/30/business/chicken-soup-for-soul-bankruptcy.html
[2] Reuters. (2024, June 30). Chicken Soup for the Soul Entertainment shares plunge 44% after bankruptcy filing. Reuters. https://www.reuters.com/business/us/chicken-soup-for-the-soul-entertainment-shares-plunge-after-bankruptcy-filing-2024-06-30/
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