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We should certainly see a blue day, least we forget the broker note from Peel Hunt.

Peel said that by the time the interims are due on 24 September, both trading and updated information from management should be POSITIVE for the share price. So many will be taking a position ahead of the H1 results. AMC have recovered 90% of their share price to pre-covid levels, so Cineworld is overdue the same. H1 and continued positive box office data will demonstrate to the market that

a) Cineworld have sufficient liquidity and arrangements in place to see it through to 2021 where global economies will recover including leisure (cinema)
b) Theatrical exhibition is still a viable and profitable revenue stream, more so when we expect Mulan to fail to generate enough to cover production and marketing/face severe piracy issues, reaffirming theatrical release prior.

“ The stock market is a device for transferring money from the impatient to the patient." - Warren Buffett.

Well it seems Peel and Hunt were correct, when they said Cineworld would be due a price target of 180p and it would be driven on the demand from Box Office.

We are witnessing this.

Tenet, BEFORE the weekend is up, is set to break $100m internationally.

This is a huge milestone and reaffirms Warner Bros message that they had no intention to skip theatrical release and go VOD.

Cinemas are demonstrating box office resilience, even during the covid era and this is BEFORE a vaccine is signed off. Just imagine what we will see in the next few months when Trump sees the FDA signs off the Covid vaccine before November elections.

Source: https://variety.com/2020/film/news/box-office-tenet-crossing-100-million-1234760782/

Forgive the typos. Predictive text changes the words.

* the same points
* quote

It has been said that Indepth is a BOT engine from a shorter. It often regurgitates they same points and negative narrative. It will even quite a Bucephalus research video from SIX MONTHS AGO raising concerns about Cineplex being bought out by Cineworld. Something that is no longer going ahead and thus dismissing any relevance in September 2020. It will even attempt to use a BUY rating from a broker to present a negative narrative. All illogical and desperate but don’t let facts get in the way when attempting to deramp. The developer hasn’t paid much attention in the BOT other than to spam a BB.

Imagine being so desperate, that you would take a POSITIVE broker rating from an agency who have scored Cineworld at a future price of 180p, to then insinuate a negative outlook. If the outlook was negative, the broker rating wouldn’t be quoted as stating Cineworld was a BUY:

1. Cineworld presents "an attractive buying opportunity" for investors.
2. States that cinema demand is due a strong bounce back once the film slate increases and anticipated a strong reception from Tenet but not exclusively reliant on it.
3. Whilst they do forecast its FY20E EBITDA estimate from $1.1bn to $318m, and not $388m to meet a 9.0x covenant TEST, this is just a single forecast. The real numbers will come in the H1 results due 24 September. Even if those numbers did materialise, the idea that lenders would default a loan on the basis of a 2% variance ($388m-$388m) / $3500m = 0.02 aka 2% is absurd, but then when you’re a desperate shorter who is witnessing institutional investors reducing their short holdings, you will look for any negative angle, even attempt such from a broker rating summarising a BUY. Peel Hunt even state that the H1 results will be POSITIVE for the share price.
4. The most POSITIVE thing the broker rating, Indepth attempts to spin is quoted as saying "...having estimated cash burn (in the absence of published guidance from the company) we believe that the business will trade at worst on a cash neutral basis from September and end the year with $240m of cash and undrawn facilities." = Debt concerns have been mitigated.

Totally agree, laidback.

Piracy is rife with Video on Demand (VOD).

Cinema piracy is getting more difficult with night vision technology employed to catch perpetrators and further more the copies will be CAM(corder) which is awful.

Cineworld have employed anti piracy measures in their effort to support studios from piracy.

Source: https://www.gloucestershirelive.co.uk/whats-on/whats-on-news/people-watching-tenet-cheltenham-cineworld-4485127

Newsflash: Cineworld ARE OPEN for business. ALL territories are now open and they have stated they are seeing VERY POSITIVE box office sales. CEO highlights sold-out movie screenings following reopening and that the strong interest had arisen without the pull of a major blockbuster.

Source: https://www.proactiveinvestors.co.uk/companies/news/927809/cineworld-higher-as-ceo-highlights-sold-out-movie-screenings-following-reopening-927809.html

In short: Ignore the doom merchants attempting to manipulate sentiment. Cineworld have enough liquidity to weather the storm, not that they need it. Mooky (CEO) is on record saying business is doing very well. Expect to see Cineworld join rival cinema group, AMC who have recovered to 90% of their pre-covid share price. Cineworld is going to do the same very soon. Once they publish their H1 results, akin to AMC, investors will see just how well they have negotiated leases, how well Q1 performed and what their liquidity and recovery path is. Enough to appease the cynics and prove that Cinema is due a big bounce back. Just as broker Peel Hunt rated when they recently re-rated Cineworld at 180p.

Source: https://www.lse.co.uk/news/CINE/cineworld-shares-set-for-hard-bounce-says-peel-hunt-6kfu4di2h7dgdjf.html

The Net Debt (ND) to Earnings Before Interest Depreciation and Amortisation (EBITDA) ratio is a debt ratio that shows how many years it would take for a company to pay back its debt.

Lenders will often undertake covenant tests, usually after each financial year to test the company on their earnings and ability to honour their loans and debts.

Pre-Coronavirus, Cineworld’s Net Debt being $3.5 Billion had a 3.4 ND/EBITDA ratio. Which was very low (under 5 is considered good) and was used to support covenant testing by lenders to instil confidence that they were in a good place to pay back their debt.

Source (Financials at a Glance, Slide 4): https://www.cineworldplc.com/sites/cineworld-plc/files/2020-03/2019-full-year-presentation_0.PDF

It’s no secret that Coronavirus has impacted footfall and Cineworld have seen zero income for Q2.

What investors need to be aware of is that Cineworld have negotiated some changes to their ND/EBITDA ratio to give them more breathing space to get through the current pandemic and reduced footfall. Cineworld have had their ND/EBITDA ratio increased to 9.0 to support the testing covenant due 31 December 2020. This means when the lenders crunch the numbers, they will account for REDUCED income and a higher debt ratio. This is favourable as one cannot expect a company in leisure like Cineworld to perform at levels pre-Coronavirus until we see a vaccine in place and footfall back to its pre levels.

Further more, Cineworld published RNS that significantly improved their liquidity position.

May 2020 - June 2020 - NEW $250m secured debt facility with private institutional investors to join a $110 revolving credit facility, presently undrawn. Question: Would new investors provide a QUARTER BILLION Dollars loan if they foresaw imminent collapse? No, they would not.

What about risk of bankruptcy? Could Cineworld fold? Well see the latest bankruptcy risk profile: 7% Risk of Bankruptcy Source: https://www.macroaxis.com/invest/ratio/CINE.L/Probability-Of-Bankruptcy

With NO big refinancing obligations looming, Cineworld has LIQUIDITY available to survive up to 18 months of lockdowns, estimates Bank of America. Yet the stock is down by more than 75 per cent in the year to date, they quoted.

Well done, Gary and welcome. Ignore the shorters. They have an agenda which your post dismisses.

The list will certainly grow, Laidback.

We have this month witness schools reopen. Millions of children sitting in classrooms for 6 hours in lessons, no social distance, no masks for primary and an environment that in comparison to a cinema which adheres to static, staggered seating with cleaning after each screening as a safe haven in comparison!

It’s common sense and no manipulative posts will distract the savvy investor that leisure and cinema are doing well and will recover just as fast as we have witness with China.

The market absolutely prices in, else when the rumours of a second wave came out, we would not have seen a dive. This is very inexperienced talk to suggest otherwise. We are witnessing a recovery excuse confidence is being restored as the future with a vaccine and reduced numbers are being accounted for in projections. Hence why many look at FUTURES

The share price of rival AMC rocketed to pre-covid price following their H1 results which showed nil revenue for Q2. So much for that prediction!

CEO Sarnoff told The Hollywood Reporter that they had never considered releasing it on VOD.

The savvy investor will take from this that the theatrical release is irreplaceable despite the VOD platform that has coexisted for 10 years now.

The revenue generation is just too much to give up and the demand is there.

Patience, patience, patience. This can only be held back so much. It will join global recoveries. Diversify your portfolio of you must buy you would be a fool (in my opinion) to miss out taking a position or averaging down before the inevitable recovery.

Debt concerns have been mitigated and a movie slate is set to with Bond, Wonder Woman and Marvel Black Widow to ensure there is enough to maintain interest.

Source: https://www.hollywoodreporter.com/news/warner-bros-ceo-talks-batman-filming-halt-tenet-theatrical-release-amid-covid-19

The movie isn’t slated until next year. They will make up the 2 weeks in their filming or post production.

A similar case was seen with the latest Jurassic Park movie. They too had some cases but resumed filming shortly after.

Good post to remind all about the fundamentals, Laidback.

All current points as well, not a dated research video in sight, like the tired cineworld bucephalus video the Indepth BOT likes to post. That video is pre-covid and even talks about the Cineplex deal that it believes is a bad idea. Newsflash: That takeover isn’t happening so discredits any relevance of the video being posted in September 2020.

Some further points that exceed the 15 are:

16. Cineworld US (73% of their estate) opening in a phased approach and will ACTIVATE 300,000+ subscriptions, each paying upwards of $23/month. That will join the U.K. and European members, too which is a significant contribution to earnings via PASSIVE INCOME generation.

17. China has met a significant milestone, declaring that their box office sales have now RECOVERED to pre-covid levels. This bodes well for global demand which will inevitably see its way being reported to Hollywood and the U.S domestic box office figures.

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

18. AMC Entertainment, rival cinema group has recovered to 90% pre covid prices which suggest Cineworld should be trading at 160p.

19. Cineplex breaching their debt covenants and breaking the terms of the Cineworld takeover.

It ended up SAVING Cineworld $2.3 BILLION DOLLARS in further debt.

From their contract:
"Should the Acquisition Agreement be terminated under certain circumstances. The Major Shareholder has also agreed to pay an additional breakfee of up to £28.3million"

To buy Cineplex at 4 x the premium when their value reduced to just a quarter - would have been a terrible outcome. No one, private or institutional investor could deny that.

Cineworld now stand to pay £28million as an exit fee - that is paltry compared to paying $2.3 billion.

Expanding on point 14. Shorts are nothing new, in Jan 2020 this year shorts were 14% and share price was 164p. Given the recent drop in shorts, capital funds are now looking to close their positions. If they don’t, they can expect to join August figures. Short sellers lost £420 million from FTSE 100 bets in August.
Source: https://www.marketwatch.com/story/short-sellers-lost-420-million-from-ftse-100-bets-in-august-75-of-those-losses-came-from-these-five-companies-11599144749

Investors can now look forward to media exposure on further Cineworld Regal theaters opening, increased box office demand and the H1 results which will reveal jut how well Cineworld have negotiated leases, reduced Capex and other associated costs to ensure they remain in a positive cash flow until a vaccine is rolled out and the covid era is behind us.

Does that go to address the additional points, Indepth? (Rhetorical question)

Ash89 using his Spider sense or Peel Hunt using their analysis predicting 180p on the basis of increased box office demand?
Not really a tough one when you consider AMC, a rival cinema group with more debt has recovered to its pre-covid share price, and demand for box office in China is 100% recovered and sales data shows strong box office demand.

It’s a foregone conclusion that Trump will see a vaccine available before the end of his existing term, that means it’s just a matter of weeks now. At this rate, the stock market and importantly, recovery stocks are just sweets in a candy shop. Take your pick and as long as they have enough liquidity to last out until H1 2021 (read: Cineworld) you’re onto a winner.

Exciting times as beyond the inevitable recovery of Cineworld to 150p, I’m looking forward to leisure, community for and business to recover to how it was presented-Covid.

Agree, Moola. Tech stocks have enjoyed an incredible bull run. It’s time for recovery stocks like leisure and travel to thrive now.
Now is the right time for Cineworld investors.

Patience will deliver a 2-3 bagger. Great price to top up given Tenet opens and so many U.S Regal cinemas opening.

The more confidence we should have that Cineworld will recover. It’s not a case of if, just when. If you’re patient the reward will come.