Member Info for Wellington99

I think a lot of it comes down to whether the MAE clause trumps the other Ordinary Course clauses. No idea which way that will go, but I'm waiting to hear the damages section. I reckon even if Cinepplex win on a technicality, the damages to *CINEPLEX* as opposed to the stockholders is buttons.
Glas that Cineplex asked for damages rather than a Writ of Specific Perfomance - i.e. forcing Cineworld to go through with the deal.

Polaris Capital have reduced their stake by 0.4%.
They increased it by the same amount on 27th Sept, so net net, no real change.

As others have said the likelihood of appeals depends on the judgement and the grounds, however, unless it's clear that the judge has erred in law, then I doubt Cineplex would chase it. The whole case was designed to make a really big number up for the claim and then hope that Cineworld would settle out of court for a smaller but still substantial sum just to remove the uncertainty. I think that Cineplex overplayed their hand and Cineworld called their bluff and now we are just going through the motions. I can't see a big win for either side and most likely a no score draw is the outcome.

Predicting Cineworld's share price is a mug's game given the low volume and number of shorters actively managing the price, but I would say that a positive outcome of the case, when allied to some hlaf decent numbers for the final quarter would be enought to entice other long term value investors into the stock, if they know that they won't lose the lot through a perverse legal outcome that gifts Cineplex hundred of million of dollars.

If that gives a gentle but strong tailwind upwards then I guess you could see some short covering which could produce a positive feedback loop and get us back over a £1.

Anyhow, that's my twopennyworth!

Sorry @latpulldown, I thought you had said that you had got in at 672p

@latpulldown thanks, but Darktrace is the very definition of catching a falling knife.

Up fourfold since IPO, questions as to whether it is overinflating its product, a massive share overhang including Mike Lynch's 17% which may make him a forced seller if he gets extradited to the US.

Looks like a rug pull to me and the clever money is getting out and looking for bag holders.

Don't get trampled in the rush to the exit!

At some point, a Tesla short will make a killing, given it's massively overvalued by any normal metric, in a market that has lost touch with reality, floated on a pile of printed money.
But as Keynes famously said, “The stock market can remain irrational longer than you can remain solvent.”

@thecouchman I quite agree, she is clutching at straws. The angle seems to be that "Yeah, we breached all the covenants, but it was due to Covid, and the MAE clause means that in the event of Covid or its like, Cineworld bears all the risks"
Which is fine, except that Cineowrld could quite reasonably say that it was happy to exclude an event like Covid in the MAE clause BECAUSE it had all the other protective clauses to rely on.

The interesting thing is looking at the short position over time. Most of those who shorted at over £2 appear to have closed them out in April 2020 and so the current c10% short was built up when the price wasn't far away from where it is now (excepting the run up to £1.20 in March this year). If the shorters reckon that there is a floor at 60p, then they may decide to get out get out before there is a stampede for the exit. That said, I would have though the run up to 80p earlier this month might have shaken a few out. All in all, I'd rather be in our shoes that theirs at the minute.

The London Stock Exchange shows a trade of 14 million shares at 07:45......
2021-10-29T07:45:07.863 GBX 60 14,816,049 £8,889,629 Off-Book XLON P XLON

Pogo001 meet The Bin
You and Pawel together make One Wit.

@ Yuri - yes, you are looking at a platform that distorts / aggregates things in an incorrect way.
Page 10 of the half year press release gives a truer picture.
https://www.hammerson.com/sites/hammerson-corp/files/hammerson-corp/Half%20year%2021/v2Press%20Release%2030.6.21%20FINAL.pdf

Interesting, so apart from the top 3 pretty much all the rest are held by financial institutions who are almost certainly nominee accounts. That would chime with the comment from Investor Services which someone on here (sorry forgot who) got from them to explain the massive drop from c80p tp c60p. The line then was that it was mostly retail investors who were doing the selling.
Although one does wonder, if the *total* short is (IIRC and please correct me) c15%, the who have they borrowed the shares from to sell them?
You'd expect it to be the big index funds but there doesn't seem to be as many on the list (from a cursory inspection) as you'd think.
I mean, HL, AJ Bell, II etc can't lend shares that they are the nominee for as they can't control the PI/ II that they hold them for - 'we' could sell at any point in which case they's need to actually be in possession of the share.
Odd, and potentially could have implications for a short squeeze if there isn't that big a float of loanable shares out there.

@latpulldown - I think FI makes a reasonable point, it's not earth shattering news but it certainly is welcome if it comes in at the c£15m level.

As to whether it was initially thought per business or site, I wasn't sure myself, but I think it is now clear it is per site.

Why don't you save your ire for the full on derampers on here (most of whom reside in green coffins for me) rather than someone who is making a reasonable point, albeit not in an outlandishly bullish way?

The Motley Fool is extremely low quality Clickbait designed to lure people in to their own tips in a 'Pump and Dump' sort of methodology.
Is Cineworld's debt a concern? Yes. If it can't be serviced or rolled over by the resurgent business then new equity will have to be raised
Is it anywhere near the number they quote? No. Only a Fool would include property lease liability which account for circa half of it. Those are commitments to pay rent on cinemas which generate income in the future. If you have a comitment to pay rent for a cinema for only one year, but have every intention to renew for ten years then the liability is small for that property, but if you have a commitment for a cinema for ten years then that appears as debt. Economic postion is the same but the Balance Sheet impacts are very different.

@HNS_77
I concur - the TL;DR version.
I suspect Cine will win or it will be a no score draw, even if they lose on a technicality, the damages will be de minimis

On the whole, empty vessels make the most noise.
That'll be a Green Coffin pleaser.

@thecouchman
I think you are missing the point - Mooky has made a big play about how they have kept rents down whilst closed and negotiated concessions, deferrals or waivers.

And as I said in the original post, this particular settlement is a drop in the ocean.

The thing to keep an eye on is how many other 'forced concessions' there are on the Cine estate where the landlord will look at this judgement and think "that's a nice bit of precendent" and go back and insist on payment when Cine's was betting that the debt would be written off.

I look after quite a lot of commercial property in London and the South East and on the whole we've given waivers for when the pandemic hit, then some half rent as it dragged on and some deferrals for other bits.

The important point of this case is that unless Cine has come to a written agreement with its landlords to waive or cut rent, this judgement puts the landlord in the driving seat.

I certainly will be pursuing several tenants who I think have acted in bad faith for back rent using this as a useful example.

I have a significant stake in the success of Cine and believe it will prevail, but I point the above out for anyone who wants to take a balanced view and see the pitfalls as well as the pluses.

Drop in the ocean but hopefully not to many more like this out there. Share price seems to have taken it in its stride.
https://www.cityam.com/londons-trocadero-wins-high-court-battle-against-cineworld-over-millions-in-unpaid-rent/

It means that the proportion of the share capital that Polaris Capital Management own has increased from 7.8% to 8.25% of the total voting stock. That equates to around 6 miilion shares give or take, and would explain a chunk of the price action we have had recently, probably with some momentum trading thrown in for luck.

It's good that they still see value at c65p (which was when the change was implemented.

More helpfully, this is a value orientated fund that is buying common equity, not a bank that is using derivatives or buying stock becasue it has sold derivatives, which is what we have had in the past.

From Polaris's own website:
"Our global value investment philosophy is based on two basic beliefs: (i) country and industry factors are important determinants of security prices, and (ii) global market fluctuations produce mispriced stocks. Global markets have proven generally efficient over time, but investor behavior creates volatility that leads to inefficiency somewhere in the world. During these periods, the stock price may not reflect a company’s long-term fundamental valuation and/or future cash flows; this is the opportune time to buy such companies."

Darn right!

@smalltrader Post hoc ergo propter hoc