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Robbie Fowler went bankrupt
Indeed. The high number of returns they are witnessing, energy inflation and wider supply chain have hurt their business model.
Now, consider Cineworld. Movies are retrieved digitally, advertisement revenue is achieved irrespective of admissions, concessions rely on popcorn kernels which have a 1000% profit margin and you begin to realise, faced with geopolitics and wider macro market conditions, cinemas including Cineworld are now beginning to see a very lucrative period for trading. Their direct competitor, the direct to video, Mock-buster streaming spinner, Netflix has witness the biggest loss of the S&P500. This provides reassurance to investors that at the current SP, Cineworld presents remarkable value and significant upside, if their Cineplex appeal is successful outright or even reducing the confusing synergy losses the seller was awarded.
Source: https://www.nytimes.com/2022/04/29/business/netflix-stock-market-earnings.html
no doubt CINE is a cash cow, it just got a bit lost.
CINE punters welcome over at boo, the water is warm - have a look L)
'Better than ASOS' is quite a low bar. Surely, losing more market share to SHEIN and cost of living concerns will continue in the foreseeable future.
On the other hand, Cinema had 968M revenue with only 90 releases in June. That is more Revenue per Movie and more spending per Customer.
why not take a position & come on over? :)
the product position is cozy and the SP is a real treat for new comers.
we could use someone as constructive as you over on the boo board. it got a bit nasty recently.
I am a bit disinterested in short positions, but awake to the underlying key concerns.
With BOO eroded margins & cash management are the concerns for me.
I am not sure how closely you have followed BOO. it lost around 95% of it profitability down to supply chain costs, air & shipping. etc. last I checked the base net margins were greater than ASOS, so I feel more reassured around a return to profitability. obviosuly online fast fashion is on trend versus bricks & mortar retail cost base, and price point in a recessision climate.
the larger concern for me is cash management. BOO have spend up large buying busiensses out of admin. use of debt likely / highly likely. not sure how closely you have followed it.
Tell me, Ocean. As a Boohoo holder, how do you feel about IG reporting that there are more SHORT positions open with them against Boohoo than Cineworld?
https://ibb.co/ZYvQVJn
https://ibb.co/XxMcRZ7
I agree with the stance, as I have previously said, the best thing CINE has going for it is bankruptcy.
With nothing to take: debt; equity; and credit notes are as you say just pieces of paper.
As the saying goes if you owe the bank £100 its your problem, but if you owe the bank £1B it is their problem.
Their is strategic substance to this I feel.
There is just one catch, perceived distressed finances bordering if not actually being bankrupt.
Why is why I feel a very dark day could come fore CINE.
under 10p? Maybe. 11p - 19p definately.
Worth a long position from this point?
Speculative at most, maybe 1/4 speculative weight.
Are we taking financial advice from scouse ex footballers now also? Lol... Robbie fowler ffs?!!
Post of the day , ALL factual and correct . Well said RS2002.
Ocean, global markets are beaten, this includes Boohoo holders like yourself, which has seen 86% of its market cap disappear (413p to 56p). Make no mistake the struggling share price Cineworld battles is by no means exclusive.
Debt for Equity is an often regurgitated FUD claim, but widely accepted as a defunct one. This is well established. It has been stated before. Current net debt (pre-IRFS 16) stands at $5bn (this excludes future lease liabilities) as opposed to the often $8bn (post-IRFS 16) that is usually touted by the press or Motley Fool article you see each week.
The current debt makeup has 68% of it formed from the acquisition from the 2018 Regal takeover ($3.4bn). This was pre Covid. Read that again. ~70% of the debt that hangs over Cineworld was there pre-Covid and pre-Cineplex arbitration.
Some will argue about a potential fire sale and the means of liquidating of assets like property - well the said property is in fact non-existent. Cineworld completed the sale of its 35 owned venues acquired through Regal back in 2019 and then leased it back “in line with our leasehold operating model” as Mooky was quoted. Mooky has a very good relationship with EPR Properties the principal landlord for Cineworld in the US btw.
With a current market cap of £280m, Cineworlds only tangible assets are popcorn machines, laser projectors and some signage. The rest of their value is derived from their business model which, pre covid was profitable every year. So in summary, let the threats of liquidation, debt for equity come. They won’t even touch the sides and as such are non viable avenues of raising capital. For Cineplex who currently have an unenforceable judgement which is due an appeal hearing in October, have nothing but a worthless piece of paper. This is why Cineplex share price doesn’t reflect a cash injection of $1bn CAD.
The current debt pile is saving Cineworld and will see that lenders with even the slightest sense of business acumen will support Cineworld and stick it through with them, else they get nothing and a large commercial property landlord is left with an empty estate and no rivals like AMC, Cinemark coming to take them any time soon.
Cineworld shareholders can sit back and continue to wait this recovery out. Shorters can continue worrying about getting sufficient stock to close their positions and covering the cost margins for loaning the stock they are dumping each day.
As always squid your opinion is as much valued as a hole in the head
It sounds mercenary and it smacks of rats leaving the sinking ship. But get real, when everyone is bailing out, you don’t want to be the last man standing - Robbie Fowler
RS always remember you ahve good things to say.
Sorry for your loss. The only thin I would add ref your view is that institutinal holders & credits have get out of jail free cards not as available to retail investors, such as a debt for equity swap / bespoke placements.
I’m also holding and have no intention of reducing my stake. I’m holding an average of 30p but as soon as funds permit, I shall be topping up. This current share price has all the bad news and risk factored in my opinion.
Theatrical is recovering and lenders will be well aware of this. Just recently, June 2022 having only 90 movie releases to that of 2019 which had a 192 movie count, has managed to generate a US domestic total of $968m in box office takings. That is an incredible feat of 84% recovery to June 2019 ($1.15bn). With less than half the movies to 2019, and to generate that much tells you the public are returning and Cruise’s Maverick has played a big part in normalising a wider demographic to that mindset. Studios have trialled streaming and day date strategies and all they have done is promoted piracy and weaker returns. Yes, Cineworld is not an incumbent exhibitioner but at second largest it is essential in the theatrical and movie eco system.
Genuine investors, institutional and retail will be accumulating and setting a 12-24 month timeframe. It is only the day traders on this board and every other who are stamping their feet with impatience. I do not believe many retail have short positions as they would rather talk the share down and acquire a cheap entry and then sell at the next 5-10% rise. That is their day trading strategy but their deramping should be ignored by genuine long term investors. Go by your own judgement and always respect your own risk vs reward reasoning.
I would rather lose the lot than give 1 share to you backpassage or any of your fellow shorters
the real face of holders: loss to much and now refuse to sell, becuase hey when you have lost 70% **** it.
beware those ramping bankruptcy!
as for ''I think all on here know how this one can bounce back''
No we dotn all know that. Could easily and equally go to zero, according to some published sources this outcome is more likely than not.
There are still many reasons to hang on to this.
I'm riding the storm.
Well they won't be having any of mine on the cheap, I will continue to hold too.
Many here are making mistake, as they are are selling with loss with bad time.
It's the time that bigger investors are collecting all those from small sellers in cheap.
I also picked some under 20p today which is 5% cheaper than last the Friday.
GLA
I think all on here know how this one can bounce back.
Fortuitously the last two months vastly improving Box Office have given it a decent chance of just that.
GL all.
I guess we are all sitting on some cash and sitting on big drops in the shares we hold.
It's a game of just sitting on some until Sept /Oct and or selling some others.
But which is the biggest question !!!!!!
Plenty of IIs were still holding when DEB, TCG, CLLN, MCLS etc etc went bust.
If Mooky sells any then it is obviously game over and he knows that, hence why he has been trying to extract as much cash as possible via wages/bonuses.
If you don’t sell now it will fall further. Remember. This is the bears market right now. Plenty of fall all around
You say that now, but if this goes pop then you lose the 30% left and you will say ( should have sold) we have all done it.