Is it a ridiculous drop?30 Jul 2021 18:04
Today cineworld announce a RNS to say they have recieved extra cash to help fund the business while it steers its way out the pandemic and on the way to the recovery we have all invested in.
Today's announcement has led to calls of could be 1.50 by September and questions on why the s.p has fallen on such great news. Which I find a little bizarre, and I'm more then happy to be shot down and told otherwise. Bit it's only great news to some. (Lth)
Sure as a lth todays cash announcement makes sure we see beyond the pandemic , it keeps us alive and kicking and makes our investment a pretty safe one long term. It enables us to have time on our hands while cine sorts itself out. But that is long term.
The market doesn't always see long term they often see here and now, mooky DIDNT get the loan for kicks or just put in his back pocket to give a few theatres a new carpet , a new popcorn machine or a new handyman to change the light bulbs, he needed it for a reason. That reason prob shows we are still struggling financially otherwise he simply wouldn't of got the loan.
To say this is a good thing short term and we should double on price for this is kind off strange, any other company that needs another bailout wouldn't rise in s.p and history here says so too. Especially a bailout that's 200m
Last financials mooky delivered more debt , yet he managed to soften the blow by announcing more money secured , that was prob for investors not to bail , but the s.p dropped and lots too.
Rewind a little further and you have a exception but with reason, Shortly after he announced we were shut a few days later he announced more cash secured and the markets jumped , this was because at the time there was a big question mark on if we were to actually survive as a company , that cash injection was massive as it gave the markets notice we are not going anywhere.
I'm not at all surprised the market dropped today , as a long term holder its great news , as a company right now it shows there are still issues to sort , we are clearly not out the woods yet.
I wonder what damage we would be in if mooky didn't get the loan.
As mentioned lots today there are loads of positives from this, investors confident to lend the money , mooky confident on recovery as am I, bumper filmslate incoming. Etc etc , and now more money to secure future.bit I see no 1.50 in September and I didn't see huge rises today either.
So for me I kind off understand why the s.p dropped today and would expect the same thing to happen in any other company under the circumstances.
Of course my my opinion only thats clearly in the minority