Member Info for Hexam

Hi Shave,

For me it's quite simple. Do you believe TUI is undervalued or not, what additional risk are you prepared to take and can you afford to take up the rights anyway?

There is no immediate financial advantage between the various options (selling the rights, tail-swallowing or taking up the rights in full). Which one turns out to be best depends on how the sp does in the future (compared to the TERP). The more you are confident in TUI's future the more that taking up the rights should appeal but this is no different really to investing more in any other circumstance at any other time - were you thinking of doing so anyway?

Of course one thing that is true is that tail-swallowing won't be the best option (assuming affordability isn't an issue) as it's the hedging your bets option - so will always be the 2nd best of the three options above.

HC - Agree, though have to double all your numbers post halving for them still to be applicable.

Hi Penta,

The H1 actuals are on the interim RNS on this site and in the investor relations section of CINE's site.

The high-level July numbers can be seen in the cleansing materials released early on in the process (though they are only on a cash flow basis). I have found nothing on August (I just estimated from box-office mojo comparisons to other months). Of course the other thing to bear in mind is that the operation reports don't include RoW.

I've done what you're trying to do already so I will be interested in what you come up with (though I doubt many others will be given the apparent preference for the sort of nonsense maidit comes up with and how the financials and facts seem to be treated as an inconvenient truth amongst all the hopium :-)

@roybee:

"Existing shareholders, other than Major Shareholder Sanctioned Persons or Entities, can exercise their Subscription Rights for New Shares during the subscription period from and including 28 March 2023 up to and including 17 April 2023"

@Foxykiwi

I think you have until close of business on the 27th to buy shares and still qualify for the rights. However, please check - and as an added clue you'll know you're too late if the price has dropped sharply to around £8 or so (the rough, expected ex-rights price).

No, if you own 30 shares you can buy 80 shares at £5 each (or more precisely €5.55).

They aren’t the bargain they may look though as your existing shares will fall in value (to around €9.22) to offset the discount - all else being equal. All else is unlikely to be equal though (due to sentiment) so whether you would be better off selling the rights or taking them up is anybody’s guess - but is a choice we all have to make.

Seif's awards are performance related (though no idea how) but it's unclear whether those (the RSUs) to the rest of the employees are. According to the scheme the RSUs can be performance related but don't have to be. There is no explicit mention in the RNS that they are related to performance although saying they have been granted "in order to align incentives across the full team" suggests they might be.

In any event, the number of shares is not huge (and far less than the 47m they could grant). What's more concerning to me is that they still have 38 employees despite those at Helios all transferring to Galaxy. That's a pretty big overhead still and a far cry from the half-dozen or so that used to run ARB pre-Helios and is one of the many reasons why direct comparisons are so hard to make to the company back then. In particular the line often trotted out that the sp rose so sharply back then there's no reason it shouldn't do so again now. Actually, there are plenty of reasons.

Apologies - our posts crossed.

The rule for LSE listed companies is I think four months which means they have until the end of April - though I saw somewhere it might be six?

Not sure though if Ch 11 affects this - would have thought not.

But CINE is not on AIM.

Agreed - but, to paraphrase AB, there seems to be a lot of backseat drivers complaining who aren't prepared to take the wheel themselves.

Dagenham - I agree, it is understandable that ARB holders get frustrated at the level of debate on other miners (especially MARA and CLSK) but I cannot think of another industry where what competitors are up to has such a direct impact on a company - literally the more they mine, the less you can mine. Also the businesses are so simple (relatively) that they are reasonably easy to compare - so why wouldn't you want to compare them to see if you are backing the best horse in the race? If you want to back something in the Derby or the Grand National you should look at the form of all the runners, not just one.

So to me any talk of CLSK, MARA or whoever is just as interesting, and potentially as helpful, as talk on ARB.

Roger - Fair enough but it's a very possible answer to your question i.e. MARA and the rest are probably seen as much better prospects so with BTC rising the money is going to those companies rather than ARB - and if you discussed or read about those other companies more it might become clear to you as to why that is the case.

"A bookie makes a book the result does not matter to him as long as he takes more in than he pays out"

Then you wouldn't make a good bookie as with your odds I could back both options and be guaranteed to win :)

Seriously though, do you really think fair odds of a bounce are only 1 chance in 11?

I think they are a bit better than that (which is why I'm still in) but disagree that the longer this goes on the better it is for us.

CINE have been very clear in their going concern statements in recent accounts that their was "material uncertainty" about their ability to continue to operate so I don't think they have been glossing over anything.

It's true that they have always put a lot of spin on the numbers (but all companies do that) and have certainly been guilty of continually being too optimistic in their projections (again quite common) - but hardly grounds I think for a legal challenge? They've been pretty clear about how much trouble they were in (and still are), it's just that many chose to look the other way (and some still do).

There's no excuse in my view. We all knew the risks (if we had researched properly) and took a chance, so if it doesn't pan out we only really have ourselves to blame.

It’s the net assets that are the current value of the business in that sense though, so assets minus liabilities. This is very small even if goodwill is included.

The lenders though will be valuing the business based on estimates of discounted future cash flows and that might get to $5bn if we’re lucky.

But where are you getting 15bn from in the January financials Tegop? If the lenders valued the assets that highly then I don’t think we’d be n Ch 11 in the first place!

“ if we’re going to be diluted, then why would someone buy more shares and average down now? If someone was wanting to get their average down wouldn’t they wait until the dilution is undertaken whereby the price would be significantly lower than it is now?”

That’s unlikely unless the dilution is really, really high. Even at 98% the price probably won’t be any lower than it is now. A heavy dilution/wipe out is priced in so if the company is saved after all and has a clear future then the mcap will rocket and as long as our share is not too tiny then we should be better off.

Of course if it’s 100%, which is quite possible, then it is game over. That’s the gamble.

CINE revenue in 2022 looks to be around $3bn (including RoW) using the figures we know already. That would be an impressive 65% increase on 2021 but that was against a heavily Covid impacted year and to get to $4bn this year requires another 33%. This looks extremely challenging as that would put it over 90% of 2019 levels and BO simply doesn't seem strong enough yet to support that.

But whether it is $3.5bn or $4bn probably doesn't matter as the lenders, buyers etc. will be looking beyond 2023 will be drawing their own conclusions on cinema's recovery and what it means for the business - and have likely made up their minds already. We'll just have to wait and see how this translates into any offers or D4E and whether they are bullish enough for us to be left with anything and, if so, just how much.

"how much of that $1bn accrues to CW?"

Around 16-17% assuming Regal continues to maintain its market share which it has done so far during Ch11.

They then have concessions etc. on top plus of course revenue from UK and RoW.

"Hexam what would you genuinely tell someone else to do in your position? Whatever it is you should do that."

AB - I wouldn't tell them anything as I never presume to tell anybody what to do with their money but I know exactly what you mean and you are quite right. Looking at it as objectively as I can I would sell now and spread it across other miners as I'm confident all the main ones will outperform Argo which has boxed itself into a corner as far as funding and growth are concerned (not to mention their still woeful inefficiency).

But easier said than done although I have moved most of it already to others (MARA, HUT, CLSK and BITF) which is already paying dividends. Would be RIOT too but never managed to catch them on enough of a dip. I should have learned my lesson having not got out when I first had serious doubts about ARB (somewhere around the 60p-100p level) and I remember getting plenty of stick from the diehards when expressing those doubts! But it's hard to cut ties completely when still at a loss and even to resist either averaging down or trying to trade out of trouble. Having said that I don't think it will reach my breakeven of 30p anytime soon unless BTC really breaks loose so I'll probably settle for the next decent spike. In the meantime I just hope there isn't another devastating RNS...