Cineworld could have pulled the curtains on its recent horror show, after announcing a survival plan which has seen its shares soar by 40 per cent.

The group, which runs 102 cinemas in the UK and Ireland, will suspend its dividends and bosses are to defer salaries and bonuses for a year in a bid to mitigate the group’s net debts of over £2.8 billion.

Just last month, Cineworld warned that coronavirus could put it out of business, especially if the loss in revenue ended up lasting as long as three months, so what does this share price surge mean for investors now?

All 787 cinemas that the cinema chain own globally are still closed, due to the coronavirus pandemic, and currently no-one knows how long that situation is likely to extend for. Signs of improvement in countries such as Italy and Spain though spell some optimism for Cineworld, and the stock market at large, with many analysts suggesting that that is part of the reason behind the current surge as investors decide they are willing to take a chance on riskier shares.

The group had faced a backlash in March after it laid off 800 staff, although since then many of the group’s workforce has been furloughed under the government’s Coronavirus Job Retention Scheme.

In a stock market update, the cinema chain said: “’Every effort is being made to mitigate the effect of the closures, to assist our employees and to preserve cash. These efforts include discussions with our landlords, the film studios and major suppliers, as well as curtailing all currently unnecessary capital expenditure.”

Cineworld was beset with problems even before the current pandemic – it is struggling to fight off competition from streaming services such as Amazon and Netflix and potential delays for upcoming blockbusters such as the new James Bond film were casting a shadow over its future.

Trolls 2 World Tour, a sequel to the successful Trolls film, is the latest title to announce it will go straight to a streaming service in April which has raised more concerns from analysts.

Russ Mould from AJ Bell says: “A longer term question concerns the existential threat to the wider cinema industry. ‘It is worth noting that predictions for the death of cinema have been made before, notably in the 1950s and 1980s when the advent of TV and home video respectively led to declines in admissions, but the industry ultimately recovered. Cineworld and its investors will be hoping for a repeat this time.’

Overall Cineworld’s share price is trading 86 per cent lower than this time last year, now standing at 60.62p at the time of writing, and it has an incredibly low valuation of 1.78 times earnings.

Judging by the current surge, some investors think that’s a chance worth taking but whether Cineworld will get a happy ending is very difficult to predict amidst the ongoing crisis.