Member Info for Hexam

At these levels some miners won’t have ‘years’ - if it falls much further I doubt many will have.

I’m not sure what the logic is of small miners being more likely to go under than big ones. Could argue the bigger ones who have overextended themselves in the pursuit of growth are the most at risk.

As long as small miners can pay the electricity bill they should be ok as they probably have little else by way of outgo.

Also not sure the intel rigs will be any cheaper. Depends on how far into the contract ARB are.

“this btc drop is a blessing for ARB”

No, it’s not.

1) The interims are based on yesterday’s BTC price. The sharp fall in price since the end of the year means it is likely ARB will post a six month loss of over £50m

2) Difficulty is not yet decreasing to any meaningful extent - in fact latest estimate is that it will actually increase slightly at the next review. So no upside visible yet from this

3) ARB have significant loans backed by BTC (and value of mining rigs) - any reduction in the value of these assets puts pressure on liquidity. A big reduction means big pressure

4) Miners may indeed go under. See 3) above

In my view we need BTC to go up. Soon. By a lot. Please.

The closing price is always set by the closing auction, and so as signified by the UT price, so wouldn't necessarily expect it to match any preceding trades. Was surprised though that it was different by so much but then again I seem to remember that the volume on the auction was tiny.

Also baffled by the £200k+ trade but really can't get excited by a single trade (unless it's absolutely huge) as means nothing in the grand scheme of things whether it was a buy or a sell.

I get that shareholders shouldn’t expect to be spoon fed and that companies should focus on running the business rather than communicating every little thing - but CINE sure do take it to the other extreme which is very frustrating to put it mildly.

Not paying down the RCF is not a default as that’s just one option to deal with the covenant.

Not paying the dissenting shareholders on time is serious but wouldn’t mean immediate administration - would be a possible step towards it though.

I’m taking no news as good news but could be wrong and either way am surprised there has been no announcement. May just be a dotting the i’s and crossing the t’s timing thing though. So could be a day or so delayed?

"I was on about after the mad covid drop when it settled and spiked up pretty high"

If that's what you were after you may be interested that the next largest rise took place on 26 May 2020 (23% for IAG and 19% for EZJ) and that there were several other days before that, but after the 'mad covid drop', where the sp increased by over 10%.

Thanks, found it. I was confused as there has been a lot of talk of a possible US listing so was surprised to hear there is already one. Looking at it though it appears to just be OTC, rather than listed on an exchange, which from my understanding means that it is simply a way to trade the same UK shares and so the price will automatically follow the UK price (though in $)..

As for the RNS I was thinking more of the covenants but agree that the payment to Regal dissenting shareholders should lead to an RNS though I'm still not completely convinced if it is simply a case of paying something that's due. Not paying would be a different kettle of fish. So in this particular instance I would personally read no news as being good news - but would still expect them to tell us anyway.

What US listing??? I'm not sure there will be an announcement (unless something has actually happened today that must legally be reported) but if there is the most likely time I would have thought would be 7am tomorrow as usual.

Yahoo has daily data and it looks like IAG's highest daily rise was 25% on Nov 9 2020.

EZJ's biggest rise appears to be 36% - on the same day.

The charts on this site show the same thing.

Obviously was some good news that day but can't remember what it was and not sure how useful this is anyway?

Sorry Tegop, but most of the debt is on a variable rate, not a fixed rate - but anyway it is the costs where inflation is key (not interest which is rising more slowly and is dwarfed anyway by the cost base). On that the good news is they have made expense savings which will have reduced some of the impact of inflation.

Much is made of the 85% but this was an expected figure NOT a make or break target they had to achieve. All that we knew is that 85% 2019 US admissions was enough in their view for them to be OK allowing for their view of other revenues and costs - we don't know how much it was enough by or how those other revenues and costs compare.

Comparing with H2 2021 (which had slightly lower US Box Office than H1 2022) it looks like they may have generated some cash in 2022 and they had $350m to start with. Plus they could have managed cash in other ways (e.g. reduced capex further). So I think there's a chance of having enough to pay down 65% of the RCF but for me it's just too close to call. Waiver should be forthcoming if not though.

It was interesting that PW said they could 'lean in or lean out' on the Intel order which I took to mean that delaying at least some of the intel order is not only possible but very much on the radar. They sounded bullish on getting more loans but I'm not sure what they have left to secure them against (maybe the intel machines)? They could (maybe) get unsecured loans but the terms wouldn't be great.

Personally I think managing cash and liabilities is key at the moment so would favour delaying machines over taking on more debt.

I think Tommy is referring to the US BO - but for June alone not YTD.

I actually believe though that there is a chance they can/have paid down 65% of RCF depending on how well they’ve managed cash but it’s tight. If not and they can’t meet the EBITDA test then they should in my view be able to get a waiver given the much better prospects now regarding BO.

“So not surviving the bear market in one piece doesn't mean bankruptcy ?“

Correct.

"I wanted to point out a reminder that dividends in 2019 totalled £450m to shareholders. At 80% of the box office, we can predict the value of the dividends currently would be around £360m. With the pause on dividends, Cineworld will retain all of these profits and can allow them to massively pay down its debt."

Please. This is nonsense. In 2019 there was a special dividend (i.e. not normal) and anyway dividends do not equate to profit. Profit after tax in 2019 was $180m whilst adjusted profit after tax was $293m.

Second - if box office is 81.5% of 2019 it does not mean profits are 81.5% of 2019. All else being equal it will be a lot less than 81.5% as a lot of the costs are fixed. In addition other revenues and costs will also move differently so for example on the plus side concessions are up, on the down side so are interest payments.

There are lots of reasons to be optimistic at the moment - notably the fast improving box office figures despite not having anywhere near a full film slate (as Hussartbr points out) but to suggest that we are making more profit now than in 2019 and are in a position to pay down lots of debt off the back of this is just silly. The most we can hope for is enough from the cash at the end of last year, and whatever may have been generated during the year from any profit or by jiggling around finances, to pay down 65% of the RCF and deal with dissenting shareholders.

Unfortunately HC most of the logic used to predict BTC price is so full of gaping holes you could drive a fleet of trucks through it.

I just take the view that BTC is around to stay and so long-term price is not something I am too worried about but on the other hand I don't have any big expectation that it's going to the moon. Even that could be wrong though in which case I lose and that's that.

In the meantime no amount of soothsaying, TA, hope or fear can tell you what BTC is going to do next. So pulling out of Corz and Riot could prove inspired or foolish. Maybe if in doubt do half!?

Fair enough - just dealing in absolutes you almost sounded like a ramper ;-)

My big concern is a further, significant drop in BTC. That would really put ARB and many others in a very sticky position with lenders.

As it is most shouldn’t have too many problems so long as lenders don’t get really difficult.

The interims should give us a much clearer idea about how much headroom ARB has.

"there is literally no threat of bankruptcy for Argo for the considerable future"

That's a very bold statement and I can't really agree with it. Personally I think the chances of ARB going bust in the next 6 months or so are very, very slim but to rule it out completely seems a little cavalier to say the least.

The questions around loans, in particular the Galaxy Loan, were answered yesterday with a lot of waffle around hedging i.e. the questions weren't answered at all. The big threat to most miners, including ARB, is that loans cannot be repaid on time or the collateral required for existing loans cannot be met because the value of assets being used (both BTC and mining rigs) to back them has fallen so much.

In addition cash flow for ARB (and for most other miners I imagine) is negative at the moment BUT the amounts are relatively small in the scheme of things even if they shut down all the machines. So the threats are really driven by the loans and the attitudes of the lenders and these will obviously be intensified if BTC falls further.

Of course even if ARB fall into a position where it looks like they won't have the funds to repay debts or post the necessary collateral they will have various options to try to deal with this (re-financing, equity raise etc.).

The position on the loans and finances in general will become a lot clearer when the interims are posted but in the meantime I think completely dismissing the prospect of bankruptcy is unwise - especially if BTC falls further.

What - that's BEFORE the storm??

HC - Haha. Tricky as I'm not even on twitter, and have no wish to be as it's just full of crap like this. Anyway, I'm sure that there are plenty that can easily debunk this nonsense and quite frankly anybody that takes it at all seriously deserves what they get. Harsh, but I just get frustrated that so many people just believe what they want to see (and then promote it) rather than just do a tiny bit of digging themselves to see what is actually there.

The silly tornado discussion is actually a good example. I didn't know the answer so just looked it up. Northern Texas IS prone to tornados. Southern Texas IS NOT.