Member Info for WolfofWarks

I've just been reading about short positions in liquidations. The shorts do not have to close, they can whittle the shares down to zero at which point the broker declares a total loss and returns any collateral back to the shorter. So all these threads I see on these boards about shorts having to close are a load of nonsense.

People keep banging on about hertz. Are they not the exception rather than the rule. Plus vehicle hire is a sustainable business.

Jesus poor this is not an exceptional company.

It’s pretty much the exact opposite.

Surely you’re sitting on big losses from the likes of SYME and RMS?

To be fair the more I think about it the more it wouldnt make sense that this could happen. It would completely undermine trust with the broker if they could weasel out of this sort of trade. I'm assuming it won't matter to them anyway as they are just the middle man and the buyer should always be aware.

To conduct a buy back you usually need excess cash .....

Yes I said this the other day. Without bond, marvel, Jurassic park and Star Wars what is actually left.

When was the last time a Forrest Gump or a Green Mile was made, when folk were actually excited to go and watch.

That said, I’m off to see Minions next week :)

My little lad loves the cinema so I hope it survives, plus I get to sort out all my work emails!

I’ve not seen this before but I can see how it may possibly be true because transactions usually clear a couple of days later.

Although I would have thought the moment a broker has accepted your order they have entered into a contract with you.

Think is the WSJ is a reputable source and they names the appointed advisors. Don’t think this is a bit of street gossip myself.

At the current Markey cap I don't think there's a chance that shareholders do not get wiped out. The problem us there's not much to offer on a D@E sea either which is probably why the narrative has changed to suggest chapter 11 rather the original balance sheet deleveraging.

The last two films I have been to see at Vue were £4.99 - Sonic the Hedgehog 2 and Lightyear. Both obviously kids films and we went in the morning.

Both empty as well.

Poor - don’t agree at all mate. It’s just a cinema chain. It’s not going to get any special government protection. It’s not of any importance giving it special treatment like a bank or a steel works.

It’s a leisure activity like shops, restaurants, etc.

Poor - Retail Parks and shopping centres are half empty. The big cinema sites can easily be redeveloped into other uses, residential, etc. It doesn't matter what they used the debt for - the bottom line is they had a post COVID recovery plan and it's failed miserably and the earnings cannot support the level of debt and it's not clear at this point whether they will ever recover.

If the WSJH report is correct this weeks attempts to restructure 'the balance sheet deleveraging' have failed. The telling thing for me is that the company haven't come out and denied the rumours. Plus the fact that the WSJ felt confident enough in their sources to name the legal firm that have been tasked with the advisory work.

This was the conclusion of the going concern statement released back in March in the annual report:

Conclusion
The Directors are encouraged by the reopening of the business and the demand for cinema-going shown by customers in recent months. Recent steps in securing additional liquidity and relaxing restrictions on the business are also believed to represent significant progress towards a return to previous levels of stability. Having considered all known factors the Directors are comfortable that the weighted base case supports the going concern assumption. However, the Directors recognise the challenges facing the business and some uncertainty around the recovery of the cinema industry following the impact of COVID-19, and the potential risks that remain, which represent material uncertainties that may cast significant doubt upon
the Group’s ability to continue to operate as a going concern. Given the sensitivity to admission levels, and any changes in the current schedule of film releases, material uncertainties exist in respect of the ability to repay the RCF sufficiently by the end of June 2022 to avoid the net leverage covenant, and the ability to repay and refinance the RCF in February 2023.
Further there is a material uncertainty as to whether Cineworld is able to successfully appeal the Cineplex judgment against it, as sufficient liquidity does not exist to be able to pay the damages awarded.
In addition, the potential covenant breaches in the severe but plausible scenario along with the inability to repay the RCF in February 2023, indicate the existence of a material uncertainty that may cast significant doubt upon the Group’s ability to continue to operate as a Going Concern. The consolidated financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

Poor - have you had a look a look at the balance sheet?

It’s a train wreck - they current asset position was £1b short on 31/12/21.

Given what’s happened here this week I think it’s fair to assume the position has got worse.

Aye anyone who had a serious interest in investment and risk should be looking on what has happened here for their own research of what can happen when things go bad and what the warning signs and red flags were.

I have known Poor for a couple of years on various boards and I'm certain he's legitimate. He's a good chap and obviously a huge risk taker. His money though I guess.

It basically says that they shouldn't have any issues with refinancing their current bank credit facilities.

If you look at the cash flow statement in the interims there has been a £477m decrease in working capital due Ito to an increase in inventory - they invested a fair whack of cash in new plots.

Chapter 11 allows the company time to re-organise it's debts. Shareholders will most likely still get wiped out due to the lack of assets within the company compared to the size of the debt. I would have thought the shares will most likely be suspended while this process happens.

Poor - the bottom line is they don’t make enough money and their destiny is not in their own hands re the movie slate.

Creditors have to draw a line in the sand somewhere and have to try and realise as much of their capital as possible. For me that time has come.

Cineworld are likely preparing for bankruptcy because the deleveraging negotiations this week have likely failed because the value of the shares on offer are not enough of a carrot, even after current shareholder wipeout.

Remember in an administration it’s the creditors who start the process if the the company do not act voluntarily and then the company gets taken over by insolvency specialists in order to realise as much of the assets as possible.