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People are probably fed up of the fact that we can’t surpass 70. Investing is lively and thrilling when your investment is going up, but it’s incredibly boring when it’s going down and staying there :D

I can see that this is the cineworld bb, however fitting with the industry I thought I’d ask here. I was thinking to purchase a few cinemark shares to hopefully see a bit more green in my portfolio. Has anyone else invested into them?

Incredible detail lpd, this is very helpful indeed. The Cineworld lawyers hopefully know all of this and know how to set their defence out in court :)

Hopefully we can just get it finished now, it’s becoming a big nuisance.

Thanks once again lpd!

Thanks Crumpets and FunInvestor for the further clarification. Ultimately it all depends on the court and the way they see it. The clause about the exclusion of special events is a bit of a minus, but hopefully we can make it through without having to pay a massive amount of money at the end.

Damn, the things that covid has done, we could have been the largest cinema chain in the world right now :D

Thanks for this information smalltrader, very helpful and informative.

Thanks FunInvestor, fingers crossed for a victory on our side

Hi Crumpets, thanks for your response.

Do you know why the Canadian courts aren’t considering force majeure this time?

In reality, I see no way that cineworld can lose this case. I believe the case that cineworld is putting forward is that cineplex exceeded the debt limit that was stated in the agreement. If they can prove that was the case, then it’s an easy home run, not only would cineplex’s claim get dismissed, but cineworld would likely win their counter-claim, which I believe is claiming for the legal and financial fees. If they don’t prove it, then can’t they still relieve themselves of the responsibility through force majeure? We had a massive pandemic, cineworld wouldn’t have been able to buy the company regardless, and force majeure seems like the perfect thing to use here. For those who may not know, force majeure is basically a term for unforeseeable circumstances that prevent someone from fulfilling a contract, which I believe is something you can use in court. All imo.

Any thoughts?

Went to watch Free Guy tonight. My cinema had over 15 showings of it today. Went to one in the late afternoon. Screen had a good number of people inside considering there were so many other screenings. Foyer totally packed compared to normal, 4 long queues for every counter. This company’s recovery is exponential and faster than expected to me. 62p sp is the bargain of the century in my eyes.

Ok great, thanks LHall and Dragon, so essentially this is a case of increasing the movement in the stock? No disadvantage to shareholders?

Thanks Dragon, please can you state specifically how listing shares in a different market increases liquidity? I’m unfamiliar with it. Thanks in advance

Nice to see a wide range of varying opinions regarding the dual listing. If they go for splitting the shares between 2 exchanges, then at least no dilution for shareholders but then we’re looking at a stock that is much more volatile due to a lower float. Plus, there is no way to guarantee that the US listed shares will react in the same way that the UK ones do. Plus, how is that creating additional liquidity?

Some people are then saying that selling off the Regal component in the UK stock and then relisting in the US is also a possibility. What a horrible experience that would be for shareholders imo. UK stock instantly diluted.

I don’t see any way that listing in the US is going to work out well, it’s a de facto rights issue in disguise, and that would massively disadvantage current shareholders like ourselves. Company is now open and making revenue, and they have a good amount of liquidity. Changes to equity to further increase liquidity seems unnecessary. They still have undrawn lines of credit, and a good amount of money left. They have also said that in the event of a full global lockdown, they’d still have sufficient money (assuming <6 weeks and recovery after). For me, it still looks like a bit of a scare story for shorters, because an alternative listing would massively complicate things for them.

Hi Dragon9, many thanks for your response.
In terms of the first paragraph, what would the effect be to current shareholders? We have an existing market share value, however how would this work in the new listing, is it a case of issuing shares in that market with the same market value?

Sorry if I have this completely incorrect, I’d love to have further insight on this :)

I think I may be one of the few people here who are slightly opposed to the idea of a dual listing or a change from UK to US listing.

First thing that came to my mind was the possibility of our current investment being diluted. I understand that we may end up getting a certain number of the new US listed shares if it actually goes ahead, but that opens up a whole new problem; the fact that we don’t know how the stock will perform when it first goes on the US listing. It’s also a very difficult thing to accurately value a new listing. I can see the company (of course) pushing for as high as a valuation they can reasonably get to maximise the amount of money they get out of it. If the new stock drops once it gets on the market, then we have a new listing in our portfolios which is instantly in the red, and our old listing which is also diluted and in the red. Wouldn’t be a good situation for shareholders.

I think it’s a bit over-the-top to expect an AMC-style rise in the new US listing as well. Many of the people who got involved in the GME or AMC saga in January bought in ridiculously high, and ended up stomaching massive losses. I think many investors have learnt their lesson after that one, hence why we haven’t seen anything similar since. And then another question I have is why didn’t Cinemark experience a similar rise?? If Cinemark didn’t get a massive rise, then how do we expect CINE to do it? They also have a massive short interest, much higher than cineworld’s. If you actually have a look at the one-year chart for CINE, you can see that CINE also received a small rise at about the same time that AMC did, cinemark also got a small rise too so imo it doesn’t matter if it’s listed in the UK or US. If it’s to come, it will come imo.

Plus, they are looking for this new listing in order to increase their liquidity presumably? So they wouldn’t do it now as the company is still recovering and the stock price is low, because the money they would get wouldn’t be high. So they would wait until the stock price recovers, however that would only happen when the company recovers too most likely. So when we get to that point, the company would have already recovered and there wouldn’t be a need for the additional liquidity from an additional listing?

I don’t see how putting up another listing would ‘maximise shareholder value’. I think that maybe Mooky slid it into the announcement to scare shorters a bit. Leave it in the UK; no FX impact to deal with and no tax to pay on dividends when it is reinstated imo

thanks for your comments lpd :)

Thanks for your response :)

Apologies, but I think I might have misunderstood the part regarding the loss of market share? Was this explicitly stated in the report and could someone please share where they found it?

Thanks

Really an amazing testament to the company:

‘In the event of a more extreme resurgence of the virus, warranting a full global lockdown for six weeks from 1st December before a gradual return to 80% of 2019 admissions in H2 of 2022, the Group would breach its leverage covenant at both its June 2022 and December 2022 testing points. In this scenario the Group would still not breach the minimum liquidity covenant and would maintain sufficient liquidity.’

Yes, they may breach the leverage covenant like they state, however that may be something that they can discuss and sort out with their borrowers. Main point is that they will ‘maintain sufficient liquidity’. This is as long as we return to 2019 levels by 2024.

‘In assessing the going concern basis the Directors have assumed the industry will return to levels of performance similar to those observed prior to the COVID-19 impact by the end of 2023, with continued gradual build up to those levels over a period of time.’

Very amazing in my eyes, derampers and shorters are in for a long wait if they really think this thing is going down that easy.

As I continue reading the report, I can see in the ‘going concern’ section that cineworld has said they forecast they can continue operating in their current state until end of June 2022. Cash is also up. I see no way that cineworld is in trouble personally, as long as COVID doesn’t close us up again, we have a solid film line up for Q3 and Q4 and I personally think that we won’t even get close to June 2022 before we continue to operate at profitable levels again. Cineworld stated they had positive working capital in June too.

Really optimistic news to me

All of y’all who were constantly thinking that the $200M incremental debt facility was because cineworld was in trouble can calm yourselves. Borrowings only up 80.9M from December 2020