Member Info for RS2002

Please read my posts and let me know where I ramp that £1 is coming tomorrow etc. Johnht, you’re just regurgitating off a deramper script that is your default argument that anyone who presents rationale to why they would invest in a recovery play like Cineworld is ramping. Have some integrity, man.

*day trader

Thanks for posting your decision. I’m sure it was a difficult decision, BeerStalkerHat. As the saying goes, only invest what you’re prepared to lose. Understand the risk profile and also your investment strategy.

It’s clear you’re a day reader and unlike long term investors, you didn’t want to see out this recovery stock play out.

I’m aware of the risk but when I consider that, cinema makes $40bn/year (pre-covid), leisure and hospitality is an industry hit hardest but one I believe will rebound the most once the vaccine is due, which has a number in phase 3 and Russia’s Sputnik appears to be in the process of issuing phase 3 data ahead of Pfizer, which is coming end of October.

Anyway, you’ve made your mind up and despite being invested in Cineworld for 6 months and NEVER seeing you post before, I’m sure you’re a genuine guy and not just some fabricated account to present a negative outcome to distract investors from making a rash decision. I guess we will also say goodbye to Indepth and Johnht, individuals who are vehemently against investing in Cineworld. So long, gents. Let’s see where this is at March 2021, I believe lenders will appreciate all industries are suffering and will afford additional flexibility. I’m sure those lenders won’t want to crystallise a loss as they have much more at stake than we investors, do.

Cleaning after each screening using products have a 99.99% effective job killing germs.

Those are good odds.

I don’t see schools employing such vigorous cleaning protocols nor does public transport, both in operation for some time.

You have clearly missed that China is a case study. They also saw the covid first.

Just a few important facts that go to weaken your scaremongering.

They are NOT formulating a conclusion. They are uncertain. Like you and I, they await the data and developments and global market sentiment.

All what makes Cineworld such an exciting share to be in.

If you have a crystal ball, take it out now and share your prediction.

I just took mine out and it says:

1. Covid cases will taper
2. Hospital admissions and mortality will remain flat
3. Global economies will recover on the back of vaccine news (read: consumer confidence returns)
4. Leisure and hospitality will bounce because of what so many have missed out and eager to embrace when normality resumes

Good luck to my investors

I would also agree that supermarkets where produce and items are HANDLED and put back on shelves present a far greater risk of spread of covid.

The same for casinos and restaurants which btw also employ HVAC (as soon supermarkets).

With cinema you’re staggered, static and don’t need get up from your seat until the movie is finished.

@Johnht

1. Pubs are accountable for 3% of covid cases increases according to data

Source: https://www.dailymail.co.uk/news/article-8780631/Pubs-bars-restaurants-blame-3-coronavirus-outbreaks-week.html

Source: https://i-dailymail-co-uk.cdn.ampproject.org/i/s/i.dailymail.co.uk/1s/2020/09/28/16/33722644-0-image-a-37_1601305650604.jpg

2. MERV 13 filters employed in HVAC by AMC and Cineworld mitigate risks with recirculated sure but also made clear they are expelling air and feeding in new air.

“We’ve upgraded our air filters to MERV 13. It’s about four times the filtration that we had prior to the COVID-19 pandemic. We’ve bought electrostatic sprayers for all of our theaters so that we’re spraying down out auditoriums with these electronically charged cleaning solutions, so we’re all over both tough and airborne transmission of the virus.”

Source: https://www.deseret.com/entertainment/2020/9/10/21430732/amc-entertainment-movie-theaters-air-filtration

This is what was in the report:

"The absence of the waivers and the uncertainty over the short term as a result of the ongoing Covid-19 situation represent material UNCERTAINTIES which are too severe for us to express a CONCLUSION on the interim financial statements."

Paraphrased?

1. We cannot formulate a conclusion
2. We cannot say this will default or succeed
3. The jury is out

So this is down to investor risk profile and appetite.

As for share dilution, I said this need only be considered in March (6 months from now), which I remind you we await some very appealing updates:

1. VACCINE NEWS
2. Bond and WW84 box office admissions
3. NY and LA to reopen (US to maintain low cases and control)

All the while I continue to assess performance in the case study that is China. Booming and fully recovered, and utilising a HVAC with filtration. The same that is afforded to schools and workplaces which remain OPEN.

1. Regal and Cineworld have introduced revisions to the HVAC to expel more air than circulate Nd ploy filters that actually clean the air.

2. If HVAC presents an issue then:

A. Why have we not witness China closing down its cinema instead seeing box office recover 100%
B. Why have we not witness U.K. cases increase on the back of leisure and pubs which use the same systems as well as shopping centres, supermarkets and schools?

Why?

Because the HVAC systems in fact mitigate the risk of stagnant air and cleanse the air.

Investors in cinema need only look across to the Far East. Assess how Chins have seen a recovery in the economy akin to a V, have witness cinema admission, at 50% capacity, mind you, drum up a total box office recovery. Now, consider than China is seeing such a good handle on Covid, it is now looking at increasing cinema capacity to 75%.

Quick maths;

1. China current screen capacity = 50%.
Box office = 100% recovered (actual)

2. China projected screen capacity = 75%.
Box office = 150% recorded (forecast)

Is there a vaccine available in China?
Yes, there is and they have been administrating this for some time and importantly have been seeing their numbers under control and are well advanced in their economic recovery.

This thread is quickly digressing to covid and vaccines which is understandable because this stock is a recovery play. The vaccine will absolutely be a silver bullet. Why? It will instil consumer confidence and as others rightfully point out will see studios much more willing to release their expensive content, that they have DELIBERATELY avoided streaming to PVOD because of the lacklustre experience, reduced revenue and piracy concerns.

This share will naturally fluctuate but, I’ll go by what the BOD issued in their RNS and presentation. Sufficient liquidity to remain in OPERATION and performing as-is until September 2021 (12 months from the H1 results). Thus, I see share dilution as an option that will only be explored in March 2021 (Q1) as that will afford 6 months before the taps run dry.

For now, I await three pieces of news:

1. Debt covenant wavers
2. Bond maintaining the release date of November 2020
3. Vaccine news

This is a recovery stock. It comes with associated risks that no one is unaware of. This is reflected in the share price.
Covid has not singled out cinemas within the leisure and hospitality industry :-)

Whilst the debt score has been downdgraded from CCCC+ to CCCC- I stand my earlier post; those who frequent this BB are NOT trading debt securities. We are trading equities securities by way of stock purchase/sell and taking spreadbet positions, be that long or short.

The debt score is something the Cineworld lenders will need to consider if they want to trade it with other debt security traders. Given it has scored lower, my take is that they will hold onto the debt and await Cineworld to pay it back. I know that pre-covid, Cineworld made progress to reduce this debt form $4bn to $3.3bn (2018 to 2019) so it is within their means to do so on the basis of a recovery and that will come gradually, it won't be overnight and a vaccine will certainly help.

With regards to the default rating, I don't make this up. You will need to read it for yourself. You can Google "what is the default risk of grade b debt" as Fitch still score Cineworld as B. It will come up as 6-9% risk of default - again a risk that lenders will need to concern themselves with as personal investors, don't ("all together now") trade debt securities.

Is this a risk free investment? No
Does this present a high reward if we see a vaccine and in turn admissions for the risk? Yes

DYOR and make the call.

I have CINE as an investment in a diverse portfolio.

Liu Zaiwang and his Jangho Group appreciate that China box office is set to overtake US domestic as the biggest movie audience in the world.

I wouldn't dismiss an expansion in Asia/China.

Source: https://www.thetimes.co.uk/article/chinese-tycoon-liu-zaiwangs-stake-offers-plot-twist-at-cineworld-0mrqz6p2m

China has achieved a 100% recovery in box office takings?

Cinema provides much needed escapism and akin to eating out is a social activity that is enjoyed as it is outside the 4 walls of a room at home.

Source: https://variety.com/2020/film/news/china-first-box-office-recovery-1234751777/

Eddie, the net debt has increased from $3.4bn to $4bn.

Converting debt to to millions and adding lease liabilities is just tacky.

Why would someone takeover Cineworld?

1. Cineworld reduced net debt (excluding lease liabilities) from $4bn to $3.3bn from 2018 to 2019
2. The Paramount decree lapsing means studios now have an oppotunity to acquire a cinema chain - this didn't exist a few months ago
3. Box office generates $40bn/year and Disney makes-up 33% of all box office ticket sales and given their takeover of Lucas Arts (Star Wars) and Marvel introducing Marvel Cinematic Universe (MCU) they are the right player

Don't forget that we investors are trading equities by way of shares.

We are NOT trading debt securities. We are not lenders who have an interest in trading or selling off Cineworld's debt.

In some respect, this means lender will need to HOLD onto their debt that Cineworld owns and ensure they support a recovery to drive it down.

p.s I'm also in NEX at an average of 122p and wish fellow NEX investors well.

Cineworld's risk of bankruptcy stands at 7%
Source: https://www.macroaxis.com/invest/ratio/CINE.L/Probability-Of-Bankruptcy

According to the Office for National Statistics, in August alone there were 34,750 deaths, of all causes, in England – 2,060 fewer than the five-year average.

One in ten of these, roughly 3,897, died from dementia or Alzheimer's disease – that's 130 every day.

A further 130 a day (on average) died from heart disease.

Covid-19 did not even feature in the top ten leading causes of death in August in England or Wales – with 482 fatalities, it came 24th, after lung cancer, colorectal cancers, prostate cancer, liver disease and even flu.

Over a year, cancer – of all kinds – kills some 165,000 people, which would be an average of 450 people per day.

Accidents at home, often while doing DIY, are often fatal. Roughly 6,000 people die this way each year – that's about 16 people every day.

Five people die every day in road accidents across the UK, while 69 are seriously injured.

Infections – including C.diff and stomach bugs – kill 5,937 a year, or about 16 people a day.

Last year, there were 5,691 suicides, 1,413 of them in the last three months. Nearly three-quarters were male, making suicide the biggest killer of men under the age of 45.

Source: https://www.ons.gov.uk/

In short: perspective and the over-reaction of governments through media sensationalism is being addressed and the market is recognising this.

Be patient, investors and ignore the noise.

I believe there is a huge opportunity for up selling.
Disney stores could be reduced in malls, given footfall to retail has dropped an instead cinema could be used to sell concessions, toys and MCU or Pixar affiliated merchandise like T-shirt’s, pens and even video games. Regal has refurbished their cinemas and they have the space for kiosks and stalls and to up sell. It would be a great opportunity for Disney and I’m sure they have their brightest looking at this.

I posted a single message congratulating dreamachine for undertaking his own risk assessment and presenting his own rationale to invest.

At no point did we hold hands and do the merry go round. I didn’t post a “£2 target next week” ramp, I haven’t said this is a sure thing. Rather, I have said look at the fundamentals, appreciate that the company would outline a plan of recovery and surprise surprise, they did.

It’s all for the reading in the presentation.

We now have to await developments.

I posted this before, I invested in William Hill at 46p and I’ve now seen it go 6x (300p). I’m not suggesting we will see Cineworld recover to 225p (5x) overnight. I do believe it has the ability (granted, at risk) to recover if we see the roadmap to recovery mature and importantly external factors like vaccine and consumer confidence return. If China is anything to go, per the case study in the presentation and something frequently posted before, I believe this will happen. When? 6 months? 12 months? I have no idea, but I’ve seen William Hill recover in 6 months and I predict the same for Cineworld. I’m holding to March 2021 and will then asses where the economy is at, where covid is at and importantly, where Cineworld are in their recovery.

Guitarman, you continue to post, because you want to re-enter, I get that. There is sellers remorse as you sold at 40p, listening to the deramping squad. Now you come on talking this down convincing others this will go 30s. Do you see me quoting 50s next week? No. Because that would be poor taste.