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in fact "Nebula directors also collected further payments from some customers, which they did not pass on to the carmaker, it is alleged in the court filings." from the FT...
sounds like fraud. not surprising, the dealers are unhappy at being called out.
from the Telegraph "Customers and dealers warn the dispute over deposits for the hotly anticipated Valkyrie will have 'no winners'"
...i would guess this is coming more from certain dealers who are set to lose out
This actually looks like good news for AML. They are getting out of a Final Salary/Defined Benefit pension scheme. Of course the employees are unhappy - no one offers these pension schemes any more, they are far too costly. A company in the early stages of recovery is in no state to offer such a generous scheme
it may just be that the buy was negotiated as a 'block', i.e. an off-exchange transaction that is reported to the exchange post-trade. Block Trades are privately negotiated trades for large volumes ('blocks') so that they take the market price without affecting the market price
If you were to place an order to buy that many shares then you would expect it to run the price up, but if its a block trade this is not the case as there is no order on the exchange. If this was the case then it would probably be labelled as such in the trade feed
...bit harsh
Presumably they short and sell something like a CFD at the same time. If the SP is weak anyway then they'd be almost guaranteed to make money on the CFD as they sell.. even if they net out flat buying back the short position
all this is good... providing the studios dont get spooked by Omicron and ghostbust the releases back into the afterlife by which point the product placement in the Top Gun film will be very hard to change when they have to update the F18s for F35s
...oh that one.
Given the nature of CINE as a holding I bet i am not alone in having some other stonks that suck some fairly salty balls today... RR. IAG etc. I guess this was always the risk
Is this an overreaction by the market? At this stage, probably - when Delta was identified as a major concern it had already wiped out India, by being early this time there is a better chance of avoiding the same fate. Add to that the drugs and vaccines and we are in a far better place, and there is no evidence to say this stops the vaccines from being effective. But given the pain of the original strain, then Alpha, then Delta its easy to see why it is a bloodbath out there today. What I would have liked to see is more evidence of vaccines being adapted to new variants.
For CINE this is a blow because any up tick in SP is always based from the current SP as there is an element of 'trading the news', so we really need good news stacked on good news for the big gains this type of investment is targeting, even if the business doesnt suffer an impact
My sentiment at the moment is to hold all my investments, but i am acutely aware that I have been doing so for two previous outbreaks. Had I sold near the top i could have banked £65K then £120K ... which would have been more than my initial target, so clearly my strategy could be much improved. I have two investments that are concerning - CINE and Carnival, both because of the debt and unsympathetic governments & markets
I dont think the market is considering the court case that much at the moment, or that it has much to do with short sellers - the price for all that id baked in unless there are increasing shorts. They both put a brake on the SP going up but I think there are plenty of other reasons for the SP to perform badly...
Investors dont want to get caught in another huge Covid downturn. that could impact very negatively for Cinema because the first thing that will happen is that films get pushed back again effectively invalidating the recovery so far, putting further strain on Cinemas even if they remain open which would increase the level of debt. There are also the inflation fears & what central banks may do in response - if they raise rates it increases the cost of debt which has a blanket SP effect for all companies with high debt
There is no guarantee that all that will happen - but clearly the 'market' is concerned
The way films finance works the theatrical run often barely breaks even with money being made through TV deals, pay per view etc afterwards. This is why a lot of industry people look at the theatrical release as something of a marketing exercise - which is somewhat unfair.... when all is said and done it does not matter where the money comes from - but the theatrical window comes first and gets the most attention
They had hoped the bond film would take about $1bn overall - which it may still do, and studios take a higher percentage of the revenue further down the chain. Cinemas will typically take about 50% of the box office - and that still stands so their revenue is still good, nonetheless it is another negative story about the industry at a bad time
I agree, this is a serious concern for me - its like working for apple and being cut off from steve jobs. What this man/woman does not know about Cineworld, markets, trading strategies, and the Canadian legal system is not worth knowing.
exactly
hey LATTERS! alright bro!
You must have the thinnest skin in the game. So funny, you filled me in the first time i posted - saying i 'knew too much' like there is some odd lizard like conspiracy to be had. You presume that like Elon's tweets that what anyone posts in here has the power to move markets... sure. But perhaps the FT does, in their LEX column this week they summarized what is keeping the SP down quite accurately - which is the outcome of the court case and the issues with debt. They added that CW is poorly placed to deal with any negative outcome from the court case - I presume they have not read your well-researched & expert legal advice letting the world know that it is a slam dunk for CW - their loss I presume
But thank you for making a small part of my morning a little brighter
warning - you are in danger of being 'blocked' by lattpulldown for any more court case chat
that is a fate almost too awful to comprehend
@smalltrader - thanks for the vote of confidence!
@fundamentals - perhaps they dont have the cash to pay out immediately, but that doesnt mean they cant get it. If it was say €30M in deal costs this could likely be added to a debt facility. Remember this company has a lot of debt - seeing it go bust is in no one's interest, though obviously a loss in the court case will be fairly negative unless its close to benign
@latpulldown, your boundless optimism is encouraging, but whatever we say here with all due reverence doesnt affect the share price. Any serious investor would look at this and realize we only have marginally better legal knowledge of a lump of cheddar, and that some opinions may be wrong - particularly on technicalities. Even though the feeling is that CW did well in the court case i certainly wouldnt back any of us in saying that we know enough to predict the outcome with a good degree of certainty
But the case is clearly not the only game in town. AMC aside other companies that have been as affected by the pandemic have struggled to recover - any company who's business has been effectively closed and particularly those with high debt and continuing uncertainty are in the same boat.
Sure a good result can force an up tick - but broader market conditions with more positive outlook on the pandemic and inflation are clearly as large a factor as the court case. The fact that the SP fades so quickly shows the lack of confidence and sustained buying pressure that exists
The court case swings on a number of points, the main ones are:
- did a Material Adverse Effect take place, or was this excluded by a carve out in the contract?
- did Cineplex breach the ordinary course - or were the actions they took excused by the pandemic?
- did Cineworld stick by the terms of the arrangement agreement?
- Did Cineplex breach the debt limit set in the contract?
The Material Adverse Effect argument seems to say that a MAF in the terms of the contract cant be caused by an outbreak of illness - so in effect cannot have taken place. Cineplex want the MAF definition to be applied so that Cineworld take this risk - but that seems against the wording of the contract
Cineplex (even according to the judge) strayed from the ordinary course, in some areas a lot and in others not so much - but other cinema companies did too, however they were not under a sale agreement at the time. Both sides claim that the other should have raised concerns or asked permission to change course - which neither did. The jury is out here.
Cineplex says that even if they did deviate from the ordinary course that Cineworld did not fulfil their side of the agreement - which they must do to invoke the Ordinary Course Covenant. For example by delaying the government approval process. Cineworld say that they did fulfil this, that this part of the agreement needed additional conditions because of the pandemic, and that the Canadian government were concerned about the deal. Cineplex say they should have forced this through as fast as possible without any additional clauses. Again the jury is out.
As for the debt limit - the limit on the Revolving Credit Facility (RCF) is £725M CAD. Cineplex were very close to this, and by march were right on the limit. This left them no room to manoeuvre so they stopped paying landlords and film studios thus increasing the debt. This did not however increase the RCF above $725, but did deviate from the ordinary course. The company clearly had a lot more debt than it said
It could go either way, but thats not the whole story either. The damages cineplex claim are for the entire deal and would leave them in a much better position than if the deal actually took place. They get the money without selling the company. Most of this is the difference in share price - but shareholder claims are carved out of the contract so these should not be granted. Then CP claim for everything else they can think of - a lot of which is unreasonable (like post-deal synergies). Cineworld only claim for expenses
For CINE to take off you will need:
> the cort case to be settled in a relatively benine way for CINE
> For general market conditions to improve, a broard rally in cyclical assets
> Inflation and the fear of a hike in rates diminising (this should come with the above)
> More promising results for Cinema in general
I think this will happen as the pandemic fades, these actions except the court case are related. As the pandemic passes and the recovery continues people will change their spending patterns. This will reduce inflationary pressures where they currently exist, the excess cash people hold will diminish as they buy holidays etc. Cinema will benefit directly from a better controlled pandemic in the same way as airlines. This will boost revenue for affected companies - who really have still not recovered, and as inflation fears fade so will the fear of interest rate rises - which will provide a further boost for companies with high debt.
Granted in some areas inflation will likely persist for some time, but even with fuel prices you can see these are already coming off, the future prices in gas for example are much lower from the spring
We have all talked about the court case, my view is that the worst outcome for CINE is off the table & indeed the outcome may well come out in their favour. Either way I would expect a relatively small payout - anything else would be grossly unfair on either side
You have certainly stayed the course sir. now for act 3/4/5 ... i have been long since April 2020 & have lost count.
"I think a lot of it comes down to whether the MAE clause trumps the other Ordinary Course clause" yes, that is certainly important, but the exact wording of the contract seems to say that illness does not count as a MAE - which is why Cineword cannot claim MAE. So why then should Cineplex be able to rely on the clause if its been excluded? .. but i would agree that this is far too close to call
yes, English law is one of our greatest yet most overlooked exports - big article about it in the FT the other day