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Just about every reason to invest in Cineplex Inc. over the past three years has gone horribly wrong. Perhaps simply betting that the pandemic will eventually recede is the only remaining reason.

As many Canadian stocks recover from the market selloff in February and March, Cineplex shares continue to explore new lows, extending a three-year decline that began with dwindling attendance figures and then turned particularly nasty this year when cinemas were closed in response to the pandemic.

The three-year journey for investors who stuck with the stock: A decline of 86 per cent and a once-attractive dividend suspended earlier this year.

Encouraging developments over this period didn’t last long. The company’s diversification strategy, based on developing Rec Room entertainment and gaming facilities, failed to ignite much interest after Cineplex opened its first location in 2016 and expanded its footprint in 2017. The share price slumped 30 per cent in 2018.

As well, the bet that U.K.-based Cineworld Group PLC would complete its takeover of the Canadian cinema chain this year for $34 a share also failed. Cineworld terminated the agreement in June.

And lastly, the upbeat hope that reopening Canadian movie theatres in August would draw back movie enthusiasts has been dashed by a second wave of COVID-19 infections. In Quebec, the government announced this week that cinemas will close for most of October in a number of populated areas. Cineplex shares slumped about 9 per cent in the days following the announcement, suggesting that the second wave of the pandemic is weighing on optimism.

Intrepid investors who continue to hold the stock or are thinking of scooping up shares on the cheap need something to go right here. That something: that Cineplex can get through the current bout of uncertainty until conditions return to normal.

For encouragement, look at Cineworld, Cineplex’s one-time suitor.

Cineworld tantalized its investors last week with encouraging figures from China, where moviegoing activities have recovered quickly amid relatively few cases of COVID-19, suggesting that the business can make a swift comeback in a postpandemic world.

What’s more, Cineworld has secured US$361-million in additional liquidity, implying it has support. The U.K. company’s share price, though down substantially because of the pandemic, has nearly doubled from its lows in March.

For Cineplex, the news is similar. The company completed a $316.25-million convertible debenture offering – essentially debt that can be converted into common shares – in July. The offering eased concerns about the terms of its outstanding debt and allowed it to repay $100-million in existing debt.

According to analysts, the offering removes the risk that the company could run out of cash in the near term, and some investors appear to agree: The debentures, which trade on the Toronto Stock Exchange, are valued close to their starting price.

Still, no one is celebrating. Robert Bek, an analyst at CIBC World Markets, in August cut his target price – where he believes the shares will trade in about 12 months – to $10 from $14 previously. (The stock closed at $7.29, up 8 cents on Thursday.) The downgrade came after the company released its second-quarter financial results, which included burning through about $54-million in cash.

The bet here is that Cineplex survives, the pandemic recedes and moviegoers return to theatres, perhaps in greater numbers as consumers embrace normality and look for reasons to leave the house once again.

But given the increasing uncertainty over when that could be, and the fact that Cineplex investors have had their hopes dashed repeatedly in recent years, investors may want to wait for some additional convincing.

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