Member Info for giantsquid

The best option is to call in the administrators and end this shambles. If Mooky and his inner circle still have ambitions to run a cinema chain, they could buy the assets from the administrators for a bargain price and relaunch the company under private ownership. It would legally be a brand new company so it'd be free of all it's former debt. It could be relaunched under a different name or the same name, and depending on how many cinemas they had, a fair few jobs could be saved. They'd also have an established customer base and social media. And they'd have the option to potentially look at relisting the company sometime in the future if they so wished. It's seemingly an attractive option - except there's nothing in it for the shareholders who would be wiped out.

Financial information that again should have been RNS'd instead of finding out months later second hand from the media. Appalling standards of communication between the company and it's shareholders.

The shares first tanked around the 17th August. We can assume insiders/major holders knew days or weeks ago the company was preparing to file for bankruptcy? Did they begin offloading on or around the 17th August, causing the share price to tank from about 22p to 8p? And again last Friday, from about 8p to a low of 1.80p - was this also down to a major holder offloading? News about the bankruptcy was broken to the market, not by RNS as you would expect, but by the MSM last Friday afternoon (about 1pm i believe?). For major shareholders to have been offloading before the news became public knowledge is technically insider trading, is it not? Which is illegal? The fact the shares fell -80% minutes after the media broke the news proves the news was a shock to the market, it was clearly unexpected and highly price sensitive, all of which further supports the view an RNS should have been released before the media had chance to break the story? What does LSE and the FCA think about this? Were rules broken? It almost comes across as the company didn't want to release an RNS outlining they were preparing to file for bankruptcy because they suspected it would crash the share price and they wanted to give major holders the opportunity to get out first before the news broke?

This has administration written all over it. It might limp on a bit longer but this is a dead parrot, bereft of life soon to be pushing up the daisies. Suspension could happen at any time followed by administration, delisting and shareholder wipeout. My advice for what it's worth would be get out while you still can - even a few pence is better than no pence!

"Investment firms are staring down the barrel of two billion loses. So for them to pump in 50-100 million to get out in profit, will be a risk worth taking'

Investment firms don't generally get involved in illegal pump and dump schemes Ian, which is what you're describing.

In the last few weeks we've seen 2 major drops - from 21p to 8p around the 17th August, and on Friday from 8p to around 1.80p. After weeks of tiny volume, we've also seen a near 50 fold increase in daily volume. Presumably, those on the inside, major shareholders etc must have known days or even weeks ago the company was preparing to file for bankruptcy? Have they recently begun acting on this news? The huge share price falls and huge increase in volume appears to suggest that might be the case? If that were true of course, then they would have been acting on insider information not yet in the public domain - which is illegal, is it not?

Ian, share suspension could come at any time. I've been through numerous suspensions before, some lasting days, others lasting many, many months. Once suspended, with the threat of bankruptcy in the air, there's no guarantee you'll ever see your money again. You have to ask yourself how you'll feel if you lose your investment. If the idea of that is uncomfortable, you're taking a risk you really shouldn't be taking.

Not a gamble I'd be willing to take poorinvestor. I wouldn't even risk £250 on this right now.

I've lost count of the amount of times I've seen chancers sticking huge sums of money into high risk shares on the brink of bankruptcy - only to lose it all in a matter of hours as the shares get suspended and never trade again. I saw it on Koovs, afren and debenhams to name but a few. You don't want to be the one who stuck £20k in @ 2p, thirty minutes before the shares got suspended and then find your £20k immortalised forever more on the share trades board as a permanent reminder of your stupidity, long after the company has gone bust. Despite the huge risks and red flags everywhere, there's always one who thinks there's one last trade to be had.

"Unless there is an RNS on bankruptcy, it is still up in the air"

According to the article i posted earlier, the company "declined to comment" about the WSJ article. If you read that as all is well and dandy and the WSJ article was most likely inaccurate and untrue, frankly, you're kidding yourself.

If you were mooky, the best option for him right now would be for Cineworld to go into administration. The guy is a multi millionaire - financially speaking, he's done very well out of it over the years. If he still has ambitions to manage and grow a cinema chain, he could quite easily club together with some of his close circle and buy some or all of the company's assets from the administrators for a bargain price and continue the company under private ownership. And there'd be nothing stopping him trying again in a few years time to get the company listed - the company would be rid of all it's former debt as legally speaking it'd be a brand new company unconnected to the former Cineworld plc. If he learnt from his mistakes, who knows, maybe he would succeed next time. The issue for him if he was to do this is by putting Cineworld in administration, he'd cost the shareholders their investments - so any attempt to launch another PLC would not be so eagerly supported by the investor community, many investors would be harbouring a lot of bad sentiment towards him and would not support him in any future venture. Whatever happens, unfortunately I don't see any future for Cineworld PLC as we know it. I think the most likely outcome will be the possibility of a few more days trading, followed by suspension, administration and delisting. Part of me suspects though we'll see a phoenix rise from the ashes, a new privately owned cinema chain, possibly still under the Cineworld name, and quite possibly Mooky and co will be involved in it. Unfortunately none of this would matter to the shareholders though as they'd be left with nothing.

Cineworld shares have plummeted after reports the cinema chain is preparing to file for bankruptcy “within weeks”.

Shares dived by two-thirds within minutes of reports by the Wall Street Journalt that the world’s second biggest cinema business has hired lawyers from Kirkland and Ellis, as well as consultants from AlixPartners, to advise the bankruptcy process.

Cineworld has declined to comment.

*Declined to comment basically says the report in WSJ must be true. If it wasn't true they'd have rushed out a statement denying it, not declining to comment.

https://www.independent.co.uk/business/cineworld-cinema-chain-closing-bankruptcy-b2148657.html

My guess is we'll see a lot of volatility over the coming days, share price swinging wildly between about 1p and 5p, daytraders and bottom feeders will no doubt be hoping for a quick buck despite the high risk the shares could be suspended at any moment - locking them in for days or weeks with no guarantee the shares will ever trade again.

A news story gets published by the MSM and the shares fall by 80%
No share falls by 80% unless the news is breaking, a shock to the market and unexpected

And yet there's no RNS and the shares don't get suspended

This was clearly highly price sensitive news that was broke to the market by the media, as opposed to RNS

I would be interested to know what the FCA think about this. Were rules broken?

Cineworld shares have plummeted after reports the cinema chain is preparing to file for bankruptcy “within weeks”.

Shares dived by two-thirds within minutes of reports by the Wall Street Journalthat the world’s second biggest cinema business has hired lawyers from Kirkland and Ellis, as well as consultants from AlixPartners, to advise the bankruptcy process.

Cineworld has declined to comment.

*Declined to comment basically says to most right thinking people the report in WSJ must be true. If it wasn't true they'd have rushed out a statement denying it, not declining to comment.

https://www.independent.co.uk/business/cineworld-cinema-chain-closing-bankruptcy-b2148657.html

"a company must notify through an approved regulatory information service like RNS any inside information relating to the company"

"For an item of news to be classed as ‘inside information’ it must meet the following criteria:

- Be of a precise nature and specific to the company

- Not be generally available

- Be likely to have a significant effect on the price of the shares (be price sensitive) if it were generally available"

These are not always hard and fast rules – a 10% movement either way has been used as a rule of thumb for a ‘significant’ effect on a share price but the FCA has historically been very clear there is no ‘10% rule’. A company will usually consult with its stockbroker to determine whether information is price sensitive.

A company needs to ask: would a hypothetical ‘reasonable investor’, out to maximise their economic self-interest, be likely to use the information in making their investment decision?

In theory the rules help ensure a level playing field for investors and prevent unscrupulous individuals from taking advantage of insider knowledge to trade the shares before information becomes more widely known.

Companies do not have to make an announcement in response to unsubstantiated rumours but if speculation hits the mark, then they need to rapidly consider if inside information should be released.

COMPANIES CAN BE FINED A LARGE AMOUNT OF MONEY FOR INFERIOR DISCLOSURE

There are consequences for failing to meet the required reporting standards. Last year, FTSE 100 mining firm Rio Tinto (RIO) was fined £27m for breaching its disclosure and transparency rules by failing to write down the value of its Mozambique mines in its half year results in 2012.

https://www.sharesmagazine.co.uk/article/understanding-the-different-types-of-stock-market-announcements

My view:
The news the company was preparing to file for bankruptcy was clearly price sensitive - at one point dropping the share price by 80%
The fact the share price dropped significantly the moment the news broke proves the news was a surprise to the market, ie, it was not publicly known information at that time. Some have suggested the news wasn't news at all, that anyone who understands the restructuring process the company is going through would have known preparing to file for bankruptcy was part of that process. But if that was the case, the share price shouldn't have reacted like it did and the media wouldn't have rushed to cover the story. It was clearly price sensitive information unknown to the public at that time - which surely should have required an RNS?

If the company is preparing to file for bankruptcy, they should have issued an RNS and suspended the shares from trading. The news was clearly price sensitive and likely to cause a lot of volatility so they should have updated the market and suspended the shares rather than doing nothing and leaving it to the media to break the news. I think most holders would have preferred to have been suspended at around 9p and remain in suspension whilst this uncertainty continues. At least that way your investment would be protected from market volatility no matter how bad the news. Unless of course the company is purposely choosing not to suspend in order to give shareholders a last ditch opportunity to get out while you still can before the inevitable happens?

The danger is share suspension could come at any time, morning, noon or evening. Suspension could last days or weeks and there's every possibility the shares will never trade again. You don't want to be the mug whose £10k or £20k buy ends up permanently immortalised on the share trades board after the shares have been suspended and there's no way back! A permanent reminder of the worst investment decision you ever made! Whoever tries to trade this needs to fully understand the risks and be perfectly happy to lose it all if it goes into suspension and never comes out.

Reports the company is preparing to file for bankruptcy are most likely true. The reasons being:

1. The company has made no attempt to deny the rumours, no RNS has been released

2. The report was highly price sensitive - upon it's release the share price fell significantly, at one point falling 80%. If the report was false, misleading and malicious, the FCA would have launched a criminal investigation into possible market manipulation - and the company would have likely had to inform the market via an RNS. As far as we know, there is no FCA investigation underway into the article, suggesting the article isn't considered by the company or the FCA as false or misleading/malicious. On a separate note, the price sensitive nature of the report SHOULD surely have warranted an RNS prior to its publication. Similarly the huge volatility that report caused SHOULD have warranted share suspension too. Very little consideration for the shareholders imo.

3. The report was covered by much of the MSM suggesting the source is probably credible and genuine. Previously companies have been attacked by shorters who publish false and misleading information about a company in order to crash the share price - but they tend to be obscure publications nobody has heard of - and that's not the case here.

Of course some have argued preparing to file for bankruptcy is just part of the process the company is currently going through and doesn't necessarily mean bankruptcy is a cert. I'm not knowledgeable enough on that to have an opinion, but i suspect events will move quite quickly whatever happens.

Cinema isn't dead and Netflix will never replace cinema - the issue is the company you're all invested in has been mismanaged under mooky. It's been burdened with unnecessary debt and driven into the ground. If he hadn't tried to take over the world, Cineworld would be a smaller company right now, but a much healthier company with a share price probably in the £'s and well on its way back to pre pandemic highs. Mooky had big dreams and aspirations and perhaps he can be applauded for that, but he's gone about it all wrong. He wanted expansion too big and too quickly and he didn't care how much debt he took on to get there - even us amateurs saw the warning signs in his strategy long ago, and yet incredibly he pushed on with his crazy plans anyway. And it's all gone horribly wrong, many would say predictably so.

A few more days of extreme volatility before an RNS lands that reads something along the line of "Shares suspended pending an announcement". Anything from a few days to a few weeks will pass before another RNS lands informing the market the company has gone into administration. In that situation, the shares would not trade again and those still holding would lose their money. As well as LTHs, daytraders also need to be careful. There's always one or two who think there's one last trading opportunity to be had and put a silly amount of money in hoping for a quick bounce, only for the shares to be suspended shortly after - and never trade again, ie, they lose the lot. Until more is known about the company's situation, this, imo, is completely uninvestible right now, a pure gamble where the odds are heavily stacked in favour of bankruptcy and losing your investment.