Member Info for Hosai

News on vaccines seems to change from hope to despair every day but pfizer still sounding quite positive - "The partners haven’t had to stop their late-stage study over safety concerns, BioNTech Chief Executive Officer Ugur Sahin said in an interview. They’re sticking with their previously announced target of being able to show as soon as this month whether the vaccine works."
https://www.bloomberg.com/news/articles/2020-10-14/pfizer-biontech-covid-vaccine-trial-remains-on-track-ceo-says
Personally I think depending on a vaccine instead of natural immunity sets a dangerous precedent and is something we can't afford to do in future, however as an investor in cine if a vaccine or treatment can be shown to even partially work in the next couple of months the certainty it will provide to the markets will be great for this stock.

Even though the debt will grow cine are receiving a 200 million tax credit in quarter 2 which I believe is due to the loss they made, potentially there would another tax credit such as this recieved later in 2021 as they will make another accounting loss at this year end. They wouldn't be recieving this tax money back without the losses they'd made this year which is a slight silver lining against the cash burn and increased debt.

Citadel clearly don't believe cineworld is doomed in regards to their position with lenders.

This letter seems well written and reasonable, hopefully the government listen and consider the three points suggestion.

It sounded like the main cinema chain leaders spoke to government ministers last week, perhaps something might come of it.
This was also in an article - "Sunak’s Eat Out to Help Out scheme, which offered diners discounts to encourage them back into restaurants, ended in August. But he is considering similar schemes for the entertainment industry after it was revealed last week that Cineworld was to close its UK cinemas indefinitely: “There are clearly lots of ideas that have been put to me and I think there is probably an appropriate time to deploy interventions like that.”
This would only really work for cinemas if they've become viable again though, perhaps in Dec or Jan, as ultimately the problem is LA and NY and the film studios and the lack of big films.

Chances are one of the vaccines with results in the next month will be partially effective I would say. Which in a sense would make a lot of the difference because if you target that at the elderly and the obese you reduce the fear of short term local hospital overwhlem which seems to be the main thing governments fear. There's also a possibility of a treatment, such as the regeneron antibody one Trump had, having good results and again this would ease these fears.
Ofcourse even without this I believe we'd be ok, from immunity but this would take a bit more time to become obvious. Interesting that Spains cases have been falling for 3 weeks though with them mostly having less restrictions than UK has. https://www.worldometers.info/coronavirus/country/spain/

You might end up selling at the bottom and closing your short after a bounce?

Boix if you are not 100% sure you should have sold why don't you put a small punt back in? If you are comfortable with your choice to sell there is no point checking updates on the fate of cinema every few hours.

I don't know much about tax but it seems like cineworlds income statement looked worse than the actual underlying cash flows were with the asset and goodwill write-downs which don't necassarily mean that much and asset values would come back. From this billion dollar loss they will get a $200 million tax credit back sometime in the spring next year, the actual loss for first 6 months was around $396 million when you take away the impairments and this includes rents that may be deferred for a long time or even abated. So in this sense potentially not as bad a loss as first assumed when you net these two figures together?
Arguably now the same thing might happen again, the income statement would show a loss that is worse than cash flow picture actually is due to more writedowns at the end of this year and cine would recieve another tax credit in the hundreds of millions perhaps to be recieved in late 2021 which help pay off any increased debt from a bridging loan?

That's a worrying and sad article funinvestor with all these related industries...its hard to know who to blame, somewhere between the film studios and Cuomo. Ultimately though the government need to offer more targetted support to all these industries but also the media need to stop telling us the plague is out there.

I don't see whats wrong with the current model, the best of both worlds, where you can see it in the cinema then wait for a bit and see it at home. If streaming is so convenient surely you can wait a few months for it to come out there?

A lot the articles like the ST one are like hit pieces, they say cine has 8 billion debt, also says "At the same time, the pandemic has accelerated the shift to streaming. Disney and Universal opted to release some films straight to the internet. Bond would have been a lifeline for cinema operators."
There is always this assumption that watching new films on your tv or laptop at home will be the invevitable future over cinema. I'm not sure why they keep making this assumption.

"Sunak’s Eat Out to Help Out scheme, which offered diners discounts to encourage them back into restaurants, ended in August. But he is considering similar schemes for the entertainment industry after it was revealed last week that Cineworld was to close its UK cinemas indefinitely: “There are clearly lots of ideas that have been put to me and I think there is probably an appropriate time to deploy interventions like that.”
Hopefully whatever it was it wouldn't be before December as Mooky would be in a quandry as to whether to open back up.

Why are you so sure they can't get more debt Boix, there will likely be promising vaccine or therapy news over the next 4-6 weeks, and cine can point to a catalogue of blockbusters which will generate a lot of revenue. Aswell as some 4dx, imax and screen x upgrades to some cinemas.

Why would they need 500? They supposidely have around 225m, which would arguably take them to around mid feb assuming 50 million cash burn a month, they will receive 200 million tax credit in quarter 2...assuming that was received in say mid May if it couldn't be brought forward the gap that would need financing would be for 3 months, around 150 million.

How has cineworld treated its employees appallingly? They had no choice but to temporarily get rid of them because they had none of their main products being supplied to them, they aren't a charity. All this stuff about "we didn't get notice so its compeltely unethcial" is ott, it was leaked out which isn't their fault and also they had clearly told staff before that if Bond was delayed they would likely have their hours cut so it wasn't compeltely out of the blue. They've even made arrangements to bring some of their workers back when they reopen. The press just always jump on companies when they have to get rid of staff even when if it is compeltely justified in this case.

Why would the creditors want to own the company if they don't believe the type of business it is has a future?

Mooky said himself on monday "we will get the liquidity we need, we have the full support of the banks who are working with us...a lot of funds". https://www.youtube.com/watch?v=2t9ks7Gf-eg
Could be positive vaccine news literally in weeks, lenders will be aware of this and it will be huge for leisure/hospitality stocks.

It wouldn't be a bailout but some kind of grants for the bigger chains might be possible. This guy from the UK cinema assocation was on Good morning Britain a few days back, saying help had only gone to the smaller independant cinemas and how we needed to help the larger chains https://www.youtube.com/watch?v=k0SN835_Pso (about 3 mins in)

The 200 million guaranteed tax credit in quarter 2, plus a fairly positive chance of a vaccine and/or treatment within months which lenders will be aware of I'm sure should ensure more liquidity if needed for a company that has always made a profit pre-covid and now has a queue of blockbusters with some upgraded cinemas.