Member Info for electricinvestor

I am personally exercising caution at the moment even though I am long on CINE. I think it will dip further before it goes back to its normal levels. The reality is the all states West of the US (from California to Washington, Montana to New Mexico) and the South (Oklahoma to NC and TX to FL) are experiencing rapid growth in new cases. This is a big part of the Regal brand footprint.

In addition to that if masks are mandated in these states, assuming the reopening is not postponed, this will impact negatively on food/drinks revenue, a very profitable supplementary revenue stream.

Whilst I believe in Cineworld in the long run, I do think the SP at £1 is getting ahead of itself and therefore I am expecting a correction.
I track the weekly US Box office (73% of Cineworld revenue) and it has not even reached $0.5m a week yet. The pre-Covid19 weekly numbers used to be ~$150m +/- $50m depending on blockbuster released that week. This is going to be a very slow recovery until a vaccine is available.
https://www.boxofficemojo.com/weekly/?ref_=bo_nb_wey_secondarytab

I would exercise caution on supposing that the pandemic is calming and that it is under control. I monitor each week the excess weekly deaths (this year vs average of last 5 years), which I believe to be a better measure of the real COVID19 impact. Surprisingly, last week the weekly excess deaths increased again for the first time since peak. If that data point doesn't improve next week, there could be lockdown measures for longer.

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/datasets/weeklyprovisionalfiguresondeathsregisteredinenglandandwales

The way I see it is simple. I am long. Today, this business has a market cap per cinema of just under £1m. Each cinema generated an av. £1.3m EBITDA in 2019. Eventually it will go back to these levels. Remember Avatar was release just after the financial crisis and yet was the biggest grossing film of all time (per screen in the world). In times of crisis, cinema is cheap escapism and this a popular entertainment.