Member Info for Hexam

No Elvis, I'm talking about a chapter 7 sale which doesn't involve future cash flows - it will be just be what they can flog the land, buildings, equipment etc for. It won't be book value but whatever value they can get on the market for these things. NPV of future cash flows only comes into it if they are selling the business (or parts of it).

Goodwill be worth nothing under C7 as it's not something tangible to sell on a liquidation. Effectively it's mainly the NPV part you mention (that was related to the Regal purchase).

Salem - they actually have about $1.5bn of saleable assets, though that's at book value - so if it came to a sale they may or may get that much (though they could also get more). I think everybody wants to avoid C7 but if it does come to that then the DIP lenders at least get something back (and possibly most or even all of what they are owed). Everybody else will probably get nothing.

Agree Wolf. The DIP lenders are in pole position but ultimately it's probably in everybody's interest (that's got a say) to compromise a bit.

Sometimes I do but to be honest I find the cheap seats comfy enough anyway - and I'm not fussed about sitting in the middle. As long as I've got my pink mice, fudge and cola bottles I'm happy!

Wolf - I think it varies by location and in particular whether it's been refurbished with recliner seats. Mine hasn't so happily I can indeed watch any film for £4.99 - and so more to spend on pick'n'mix :-)

Thanks for the info on Bromley but bit far away for me. My local Vue is £4.99 if I choose the cheap seats but I'm not bothered whether or not CINE is more expensive as I assume they know what they are doing and have set the pricing to optimise revenue - and personally it doesn't affect me as I don't have a CINE nearby anyway.

I'm not so sure they couldn't have filled it had they focused more on just getting machines (even hosting) and less on trying to get everything perfect, buying more transformers etc. and gambling on a HODL policy. If BTC had kept going up they probably would have still been OK and could have fitted out Helios gradually - or if they had preserved cash better by selling some BTC and not trying to build the perfect solution they may have been able to keep the machines they flogged and buy others on the cheap?

Still we'll never know now and I suppose not much to be gained by dwelling on what could have been. I think we agree he's been a bad CEO and an unlucky one - we just disagree a bit on just how bad versus just how unlucky!

DS - Luckily the SP here has very little to do with company fundamentals here and all to do with sentiment/FOMO and BTC rising. And long may that continue so that I can claw back some more of my losses :-)

Mind you I agree, if there is good news on the intel rigs then that will help too. Somewhat sceptical myself but doesn't hurt to hope!

Chae - I'm actually a bit more sympathetic towards PW. Yes, he's made lots of mistakes, but most CEOs do, they are only human, but if they had got a PPA (not doing so was one of the biggest mistakes admittedly) and BTC not done so poorly then Helios would probably been a masterstroke - a great success that papered over the cracks.

Still, I am amazed though he is still in place and it will be interesting to see if he changes how he goes about things if indeed he does survive.

Btw I hope you didn't put too much into GCAT - seems like even more of a funding horror show than here.

Although a lot of their problems are of their own making I agree that they've been very unlucky with timing too.

Their overarching issue though has been that they didn't mitigate enough against downside scenarios and effectively went all-in on their strategy - a bit like many of the posters on this board it appears. That can be very lucrative but equally it can be catastrophic, as it was for them - effectively they bet the farm and have now, literally, lost it. Hopefully they can run the business now like proper professionals rather than like high-rollers in a casino. A chairman would be a start.

Maybe luck can also turn in their favour but there are plenty of things they need to sort out that have nothing to do with luck like their dismal efficiency (coins mined per EH) which has been an ongoing issue for over a year now.

They're biggest problem now though is the lack of available funds for growth to take advantage of any upside (or protect against a fall back in BTC). Still, at least they remain in the race even though they are so far behind now that they have effectively been lapped.

Yes, it appears likely that there is some hidden message in this docket as otherwise it seems wholly unnecessary. It's almost as if there has been a communication breakdown between the company and the lenders so that they are having to talk through a third party in coded terms like friends or lovers in a quarrel.

Whatever that message is I agree that it seems positive as it suggests they are fighting their (and consequently our) corner which hopefully means we'll end up with something rather than nothing or, even better, a bigger something than just something.

Hi Huss, thanks but I wouldn't claim any special knowledge on this - I'm just going on what the docs say. To me though this latest doc doesn't seem to say anything much that is new really. We already knew (from the last RNS and other communications) that they were pursuing both a restructuring option with the lenders and separately a sale (of assets) via the 'marketing process'.

We also knew from the Jan 4 presentation that Jan 16th was the date set for "Filing of Plan and Disclosure Statement (in
each case reasonably acceptable to the DIP lenders)"

Clearly that filing didn't happen which suggests that the plan hasn't been 'reasonably acceptable' yet to the DIP lenders and this latest docket with respect to the marketing process just seems to confirm this. The odd thing is that they felt the need to issue this docket at all but perhaps by saying they are switching their focus to the sale option they are just trying to get the lenders to pull their fingers out and respond on the plan?

CINE have repeatedly said that whether it is a restructuring or a sale it is likely in either case to mean a significant dilution for existing shareholders so it may not matter too much to us which option it is, the end result for us will probably be similar - but we're no nearer I'm afraid to knowing what that result is, just that the way we end up there MAY be a little more likely now to be via a sale?

The dockets already have a lot of information that provide updates on trading and the revenue figures they include suggest a similar sort of rise to Everyman and probably a bit more - perhaps around 65%. This would give revenue of around $3bn for 2022 compared to $1.8bn in 2021.

We also know from the information in the dockets though that this is a lot less than they were expecting and not nearly enough to turn them profitable. It's moving in the right direction though and early signs for 2023 are encouraging especially in the depth of films being released but there is still some way to go.

I think they are trying to move somewhat faster than that (certainly that was CINE's initial aim) but yes, things could drag on especially if the various parties (notably enough of the lenders) can't reach agreement on the plans that are being put forward.

That's possible and it would be a huge step forward but the Chapter 11 outcome should be known well before then which will seal our fate one way or the other - and make CINE's profit outlook by that stage either a point of utmost interest to us or an irrelevance. Let's hope for the former!

"financials are revealed on the 16th march 2023 if they turn a profit which is possible."

No it isn't. They've been releasing profit figures every month. Loss for the whole year before tax is likely to be over $750m.

There could indeed be gains to be had from buying CINE at these low levels but your ramp is just silly.

Hi Huss, I've now watched the video and to me it does seem that he is suggesting the longer the process goes on the lower the dilution is likely to be because of the positive Free Cash Flow they are/will be generating, so I don't think he was misquoted really (apart from the poster using the word 'vast'). At the moment CINE are not generating any positive cash flow and their own projections suggest this will reman the case for another 6 months at least.

He also spends a lot of time talking about dividends and dilution but he uses 2019 as his starting point with a $500m dividend. The problem with this is that 2019 included a one-off special dividend of $278m (following Regal acquisition and a big sale and leaseback arrangement) so he really should be using something closer to $200m though even that might be toppy. He also talks about dilution (in his terminology) of up to 1000% (which I would call 90% instead). Either way I think that is not an extreme figure though and we'll be lucky if it's much less than 90% (or 1000% in his language).

He made some good points on depth of film we are seeing in January and in general he seems to know a lot about films, I just think he comes unstuck when talking about the financials.

Penta - they should be released at the end of this month and it will be interesting to see how much exactly Avatar 2 has helped. I don’t think they’ll show a profit but they should be closer to breakeven and act as a useful guide to January’s outlook.

Hi Huss, no I haven’t watched the video. I watched the first few and, although he was keen and likeable, by his own admission he knew nothing when it came to company financials and this was clear in the bizarre assumptions and methods he was using to value CINE. So I stopped watching as it was just annoying me how much he was mangling the numbers.

Maybe he’s improved but I was only reacting to the quote that CINE are making ‘vast’ amounts of money at the moment that can be used to pay down debt. The company is releasing actual numbers each month that show clearly that this isn’t true.

Given that they lost $100m in November off the back of domestic box office of $627m I don’t think you are too far off in your $750m estimate for breakeven. Until they get to at least that sort of monthly domestic box office they won’t be in a position to make money and so think about reducing debt.

So without watching the video I can’t comment on what else he may have said but if he has been quoted correctly as saying CINE are raking it in at the moment and able to reduce debt then CINE’s own numbers prove this to be absolutely false.

“the vast amount of cash coming in on the back of all the new movies so far, can be used to pay down debt”

If this is really what he is saying then I’m afraid it’s simply not true. I’d rather believe what the company is actually telling us in the financials reported each month in the court documents than a keen but financially illiterate YouTuber.

The company is not making any surplus cash at the moment that can be used to pay down debt, let alone vast amounts of it.

The debt now stands at over $6bn. It’s going up, not down.