Member Info for Hexam

HNS - With respect I think you have misunderstood my point.

Yes, of course film releases matter but at the moment what happens in Ch11 matters a whole lot more. And yes, they are linked but CINE should know the outlook better than any of us and will have put their view to the lenders. They have also provided projections of financials up to mid-2023. Since the Ch11 is still ongoing and seems 'on track' (i.e. no curveballs as such) I would hope that the lenders do have faith already with the film slate already known and the longer term expectations.

It's only if the films released and coming up significantly out perform (or underperform) that it might, in my view, make any more difference but with Avatar that doesn't seem to be the case either way despite some here exaggerating its performance.

“Hexam this is a public bulletin board and anyone can post their opinon”.

Indeed that’s fine, I’ve never suggested otherwise. I just asked you a question to support what you were saying and you haven’t answered and instead are just deflecting. Which is your choice, so fine again.

“It only becomes a LIE if it is reported to the market and misleads shareholders.”

What?????

Also bending the rules is one thing - they all do that. Lying outright is another thing altogether.

"The Board has a duty to ensure Argo survives"

It also has a duty (and a legal one at that) not to lie in an RNS.

No precious - I'm not suggesting you were saying it was a FACT I was just asking what makes you THINK they have more than one month's cash in hand and so that PW is blatantly lying (and therefore doing something criminal).

As to the DCA you are just making a throwaway comment as to it applying to crypro more with no back up. You're right though, it doesn't matter.

It is odd but I have suggested several possible reasons why they have run out of money. We don't know though, but there will be reasons even if mine are not any of them. That's not the point though. Precious is suggesting they are lying in an RNS - not just bending the truth. That I find very hard to believe, even for PW.

First, DCA is not a 'crypto term' it was around way before crypto
Second, to do that on ARB seems bizarre, but your choice of course
Third, where is your evidence that ARB has 'cash in the bank to last a few months' which means that PW has outright lied in the RNS that says they have less than a month?

You do realise that article proves my point not yours? It says (after the bit where it talks about beating Spider-Man outside the US and just for the Friday) that:

“Despite these record-breaking overseas results, the domestic number of $53M - including $17M in previews - is somewhat underwhelming. This placed the sequel as the 44th biggest domestic opening of all-time and only the 6th-biggest Friday of the pandemic era, just surpassing the $52M of Top Gun: Maverick.”

Figures for the weekend show that domestic box office was half that of Spider-Man and worldwide the takings were lower too. For CINE it’s also the domestic number that counts most.

It’s still a very big number for Avatar though which is good and though it may be lower than expectations it won’t make or break what happens in the Ch 11 which is far more important.

“Bonkers twist how you wish buddy”.

Gambit - you’re the one doing the twisting saying ‘just this weekend Avatar 2 beating spider man on opening’ - it didn’t.

And as for ‘bumper films released all this second half’. Seriously? There has been a real dearth of releases alongside a few blockbusters and we know CINE has made losses over this period and expects to make further losses for the first half of 2023.

So you can put up whatever list of films you like (just as many a deluded ramper did for 2022) but Bonkers is right - it matters little. What matters is how we exit Chapter 11 and what it means for existing shareholders. I’m optimistic but we’re a long way from finding out the answer.

In the meantime it’s clear from the number of upticks your post got this morning that many are just interested in what they want to hear not what is necessarily the truth. That’s not a recipe for good investment decisions I’m afraid.

No - I think he was just before my time here. I was more the ‘Tiger’ era.

“YOUTUBE MR WHITE knows A2 it's going to be a big success and that's good enough for me”

So you take your advice from a pretty clueless YouTuber? Or are you Mr White perhaps?

Thanks Allkap for providing some sanity in a sea of stupidity.

I see the trolls have turned up again after a quiet few days - no doubt attracted by the red dot siren call of an RNS (that they clearly don’t understand the irrelevance of at this point).

Just wish they were more original and imaginative (think that’s the third ‘last one out turn off the lights’ comment in the last week).

Almost as bad as the rampers and their rocket ships.

*$82m not $882m - obviously!

"thoughts on what's happened to the $39.9m I mentioned a few posts down?"

sorry - didn't see this earlier but suggested a few possibilities in my other reply.

Looking at it a bit more though, part of it does seem to be down to NYDIG/bitmain. The total funding was up to $97m but PW said recently the amount outstanding was $84m (or $882m)? So either they didn't take all the funding available or they've paid some back already. Either way it appears more has been paid out to bitmain effectively from their own pocket so, depending on timings, this could be part of the $39.9m.

$9m of it is also normal cash burn (at least my estimate of it ) in the period in question (Oct to Dec) plus you mentioned Galaxy and for some reason I've got $7m in my head for that?

I mentioned consultancy costs and I'm sure they've burned a lot already on trying to extract themselves from this mess even before the announcement of the three organisations they've engaged.

I also can't remember what happened to the transformers and whether it is possible they had outstanding commitments on these too?

One other thing that will be giving them a headache is the value of assets they are holding on the balance sheet as the rigs they do have will be worth a lot less than their book value and I can't see how they can avoid writing these down - but this shouldn't affect cash they need to hold.

I still feel there is something missing but we only have Q2 to go on and that was complicated by a lot of timing issues (including whopping prepayments) plus a lot has happened since then so it's hard to gauge what the position should really be now.

"So basically your example is a 12 month loan with selling BTC as the source of repayment, and where ARB hedge BTC at $15k".

Not really. What I'm describing is ARB simply selling it's BTC in advance at a low enough price to attract someone to make an advance purchase. No hedging from ARB, though of course they could do that too to give them back most of any upside should BTC increase but that would be yet another cost to eat into their cash.

"And are you still sure cash burn is as little as $2-3m a month?"

It could $3m tops but as I've said before what I'm talking about is 'normal' cash burn i.e. from operations (including overheads) and interest. The interest is at fixed rated and why would normal, ongoing overheads increase? Power, as AB says, is known

So that's the sort of figure that is ongoing but clearly other stuff has been going on but we are just in the dark on what it is. Candidates could include:

A temporary spike in legal/consultancy costs (we know they've engaged at least three new parties - and they won't come cheap)
Committed costs to intel and/or penalty charges?
Withholding of funds from NYDIG for the last rigs so that not only did they sell them on the cheap they had to pay for them out of their own funds in the first place
Severance payments
Other unknown one-off costs

It is surprising that they are so cash-strapped despite the measures but I can't see that it is due 'business-as-usual' costs.

HC - My example was simplified (I was cooking the tea at the time)! The issue you suggest wouldn't arise in practice as the deal ought to remove it. For example It could be we give you $27m upfront and you give us 150 BTC a month for 12 months - or longer until the total is 1800. Or it could be you give us everything you mine until it comes to 1800.

The main risk for the lender is that ARB still goes out of business (the BTC price they would hedge against I imagine so that they would have an 'assured' margin).

I can see this sort of thing being viable to cover short term liquidity issues but ARB's liquidity issue is ongoing and indefinite i.e. it lasts until BTC recovers enough which could be anything from a few months and never.

Btw I’m assuming ARB hand over the agreed number of coins at the end of each month they mine them in this situation - but reading other comments maybe I’ve misunderstood the suggestion?

It’s not hedging or at least that’s not the main point of it. It is getting revenue up front so that operations can continue several months or more instead of currently one. Of course it just pushes the problem down the road and if BTC doesn’t recover then will have to do the same again but from an even worse position.

The cash burn is $2-3m assuming they sell all their bitcoin each month but in this scenario they have little or no revenue coming in so cash burn will be $5-6m each month. So in my example less than 6 months operations will be covered by selling up to a year’s BTC.

They could sell more than one year’s worth and so get more cash upfront but then they are in a very weak position at the end of the period even if BTC rises significantly as they haven’t benefited from the rise in the meantime unlike their competitors.

This sort of thing is not uncommon but in ARB’s case I don’t think it works as their cash burn is too high and requires them to sell too much of what they mine and for too long. They also need to sell it a very attractive discount given the risks to the other party.

How about $27m up front for 150 BTC each month for a year.

Other party gets cheap BTC ($15k), ARB gets accelerated cash flow.

Still plenty of issues but can see the logic.