Member Info for RS2002

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A movement of +\- of < 1%

Where was the 20p drop? Did I miss it?

This bodes very well for the The Net Debt (ND) to Earnings Before Interest Depreciation and Amortisation (EBITDA) ratio test that is approaching next month at 5.0x.

I suspect a waiver for this is coming, too.

Come now Parsnip, post up how many pips you bet against Cineworld?

You know the handle turnip is also available, right?

This is a positive RNS. Cineworld are managing cash flow and have already obtained waivers from a first set of lenders and expects more to come.

I am not at all surprised the day traders are desperate to manipulate the message. The market will read it correctly.

I would spend your time ramping Boohoo, parsnip.
This is a waiver achieved from lenders and more to come.

“Cineworld HAS OBTAINED from lenders under certain of its debt facilities WAIVERS of, or undertakings to waive, any events of default arising under those facilities as a result of non-payment under the Unsecured Facility Agreement. Cineworld also expects to obtain equivalent waivers from holders of its guaranteed convertible bonds due 2025.”

I notice the traders are out to push negative sentiment but I am reading this as a positive.

If they want to manage cash flow more all the better.

This sends me two messages:

1. Demonstrating their funds are limited if they are pushed into a corner or fail the appeal against Cineplex

2. They are trying to maximise cash flow to negotiate an out of court settlement with Cineplex

Encouraging words from Mike Hickey, an analyst with venture capital firm Benchmark, who believes Netflix could debut 10-12 original movies a year in cinemas and “generate incremental revenue and publicity”. Has the penny finally dropped?

I really hope this moves forward and when you consider that:

a) Netflix LOST $54 billion in market capitalisation
b) Predicted to loose 2 million more subscribers at the end of Q2 (30/06) their next reporting period is going to be scathing to investors and the wider market

They could mitigate this and buy out a significant holding in Cineworld, in the process agree to maintain the existing 30-45 day window many are operating with or come to an agreement with Cineworld and AMC as Warner Bros and Universal did a year ago.

Source: https://seekingalpha.com/news/3830941-netflix-rises-even-as-benchmark-remains-skeptical-of-recovery-in-stock-price

Netflix is giving its upcoming movie "Bardo," from Alejandro G. Iñárritu, a global theatrical release before its debut on the platform by the end of the year.

Very keen to see how this plays out. This is a good strategy. Reclaim costs from box office and offset the movies budget costs rather than have the Netflix subscriber absorb it into their monthly membership. Netflix have a real opportunity to work with theaters and improve brand recognition in the process and mitigate streaming churn. A win win for audiences, studios and theatrical exhibitioners.

Source: https://deadline.com/2022/04/netflix-alejandro-g-inarritu-bardot-chronicle-of-a-handful-of-truths-1235011021/

Whilst Cineworld doesn’t operate in Italy and we know that 75% of revenue comes from Regal/USA, this is encouraging and may influence studios to reconsider their international approach.

“Del Brocco and Letta said there was no need to equal the French window, which is now set at 15 months, though they called it effective in helping to sell movie tickets, but have asked for a SIX MONTH window to be put in place for all Italian and international releases, at least for the next years.

Source: https://variety.com/2022/film/news/italy-theatrical-window-box-office-debacle-1235256876/

Shorts are nothing new to Cineworld.

Pre-Covid when Cineworld was trading in the 200p range, it saw short interest rise as high as 16%.

Right now, I am not seeing any TR-1 positions advertised. Institutional and inside investors are not panicking or reducing their holdings. Why should I?

We are about to enter the summer months and the streaming bubble is deflating and potentially bursting. I expect more churn rate being reported and we look forward to some great movies starting with Strange 2 this Thursday.

The current debt is $5bn (pre-IFRS 16). Pre-covid it was $3.4bn, so to put that into perspective, ~70% of the current debt was there as part of the Regal expansion and was not down to pandemic shutdowns. Yes, it has increased but we are reminded it is the debt structure protecting it from collapse.

I am looking forward to positive press coming and LPD has reminded us that the Royal Premier of Top Gun 2 Maverick awaits us. Like Bonds No Time To Die, it will garner international press and position cinema going as a popular, inexpensive out of home experience for teenagers, families and young adults. The peak demographics that represent 80% of cinema goers.

I’m happy to sit tight and wait this out.

TFG Asset Management can sweat this one out.

1. Cinemas have done well historically during recessions and sharp downturns in the economy. Between 2008-2010 the greatest recession since the “Great Recession” and cinema did very well. So much so it was acknowledged as being “recession-proof”
Source: https://www.hollywoodreporter.com/news/general-news/how-recession-proof-is-hollywood-now-1169172/

2. Streaming and streaming churn is high. Netflix lost $54bn in market capitalisation. 200,000 reduction in subscribers. More to come. Ask yourself who pays this in the family? The teenagers in the home? No chance. The parents pay it. When they stop paying it, do you think “tech savvy” teenagers are going to cover the cost? Not a chance. They will be the first to download kodi and pull a stream of any tv series they want. Movies? Well that depends on the rip. If the quality rip is not available, they will not settle for a CAM copy.

3. Cinema peak demographics are 15-24 year olds. They are mostly in education and they have a considerably larger disposable income thanks to living with parents rent free. If the parents are cutting back on leisure activities, will they teenagers accept they or will they want to find out of home experiences on the cheap?

4. Summer is approaching. The movie slate is jam packed with big blockbusters.

5. Try harder.

Many seem to think this is a residential house being repossessed by a retail bank.

If this was the case, U.K. law states that the court must normally allow 28 days before a possession order comes into force and that this time period can be extended up to 56 days.

It is NOT.

It is a commercial, publicly listed company with intricate jurisdiction between two sovereign states.

If a lender wants to take the company down default and repossession, you would be looking down the barrel of 6-12 months at a minimum I would imagine.

Until then, POG would carry on production and where would geopolitics be at this point?

Far too many assumptions and legalities involved for day traders to exploit for their narrative.

I’m a LTH, content with sitting on a modest holding waiting for a rerate when the situation resolves. If it doesn’t, I will accept the loss.

Good luck, all.

I have managed to buy 100k shares in the ISA at 1.95p.

If this gets to 30p again in the future that is a £30k capital gains exempt return for an initial outlay of £2k.

No risk. No reward.

Good luck, all.

*early data

It would appear TFG Asset Management increased their short position against Cineworld on Tuesday (26/04) this week which explains why we saw an unusual sell off with the wider market. This was them dumping shares to drive the share price down.

From what I can see, they are also shorting Petropavlovsk mining and have demonstrated very short term positions. Reducing significantly within a week.

Next week we should have some early days on Strange 2 and a resurgence of cinema going that will create positive press.

I was able to top up at 28p and I’m focused long term so I won’t be chasing micro movements in the share price but wanted to share some context for others who are staring at the chart on a minute by minute basis.

If a total box office of $8.8bn can be achieved, I would be very happy with that. It would imply a U.S. box office recovery of 80% of 2019.

Not to sound like a broken record, but whilst this metric or KPI is slightly under the best case scenario, with the other revenues and the cost savings taken into account and importantly where the current share price is at, it implies significant upside.

Good point, LPD.

It is no secret that 007 No Time To Die grossed more than any other Bond film in the U.K.

It grossed a total of $775m internationally.

The Royal Premier gave it much needed publicity.

We should see the same with Top Gun 2.

Rival cinema operator, AMC Aron Adams has tweeted his high praise for the movie having seen an earlier preview.

Source: https://twitter.com/CEOAdam/status/1519785039944249344?s=20&t=t45Zdk27emFLYAnm3BpuEw

Paul Dergarabedian, senior media analyst at Comscore says that the industry's summer, spanning an 18-week period, is traditionally responsible for about 40% of the domestic box office.

So those who were saying we are way behind on forecast and projections, if Cineworld can make 40% of its ticket sales during this period, lead into Autumn and Winter when Avatar 2 plays, I would say puts Cineworld on a good trajectory to recovery.