Thanks everyone.
So just for the sake of making sure ive understood this all…
Buying shares doesnt help the company in question.
And, is there a case scenario where things could bounce back here for Cineworld UK? or is it just a case now that everyone needs to sell asap and cut losses ?
And finally, has anyone got any recommended reading / dummies guide for total beginners to learn more about all this trading ?
Thanks
Buying DOES help the company - it increases the market cap which helps leverage borrowing.
Its not the time to sell IMO. There is a good chance that after chapter 11 the company debt is restructured in a more sustainable way. Chapter 11 is not bankruptcy in the sense the company is going under, its more like an IVA here in the UK.
Its in creditors interest for the business to remain viable - they stand to lose billions if it goes under.
Another factor is the ongoing court case, which chapter 11 protects them from and the appeal is pending. If the outcome is positive then the business is in a different position.
Anyone buying needs to be clear though, this is a risky stock. The upsides are huge, but there is the real possibility that any investment could be wiped out.
Personally, i dont think its likely and cant see shareholders being diluted further - its in penny stock territory as it is.
Risk/reward is high. It all depends on if you see the risk as one worth taking.
The risk is high I’m not sure the rewards are, even if they do manage to restructure the debt I should think the dilution of the current shareholders equity would be huge. Any money “invested “ in this now isn’t investing its gambling no more no less
.plus the dilution isnt necessary a reduction in share price what happens is every 100 shares in old cineworld gives you one share in new cineworld the price stays similar.
I’d dispute almost everything you said here. It screams confirmation bias and maybe lack of experience.
But to limit it to 2 things:
Buying does NOT increase the market cap. If someone sells me a stock at a price below the current market cap/share, I decrease the market cap by buying. Also market cap will not generally be used to set interest rates on borrowing - especially if the company is already drowning in debt and will never service it fully like in this case.
Like Roger mentioned, there’s still massive risk of loss and dilution but no real upside.
Most of these processes (yes, I’ve been through them as an investor) leads to you receiving e.g. 1 share for every 100 you have held after restructuring. This is a massive loss and in this example, you’d need to make 10 000% just to recap this loss. 
You’ll never break even.
Its a question of the value of the business, at current price the market cap is £60m.
Even with the debt load it has, it is not a £60m company. It was a billion pound company pre covid.
When it comes to dilution, its a question of what is diluted.
Is it the £60m business based on the price today?
Or, the business that was trading at around £2 a share pre covid?
Thats the judgement people need to make, will the business recover with the debt restructured?
Its a business that turned over in excess of £1b last year post covid. Can it return to the £3b pre covid?
If it does, dilution of 90% on the pre covid business means that shareholder should be looking at about 20p per share. Obviously, we are talking about dilution of the current price but my point is the current price is not reflective of a business with the potential to turnover in excess of £3b.
Thats my point - for me the dilution has already happened. Even if the shares ARE diluted further the potential of billions in turnover mean a substantially undervalued business which should negate a lot of that dilution.
2 big provisos though - getting debts sustainable which chapter 11 should help with and there being a future for cinema.
Neither of those are guaranteed. And, i am in complete agreement that this is a very, very risky gamble.
Shares are up 5% on the chapter 11 announcement in the UK, im waiting to see how the US market takes the news at 1430. Thats going to be the decider - if it falls, its done. If it rises as i suspect it might, there is hope and opportunity.
It honestly could go either way, but there is a path to profitability for shareholders just as there is a path to ruin. Just have to see how the markets react.
I have to admit I chickened out for the most part, but I’ve kept a couple of hundred just for S & G. The stock hasn’t fallen soo… what now?
I think its worth a small punt . If it goes bad i lose 60 quid. If it goes back to where it was years ago (in years to come ) then happy days .
From personal experience this is is a terrible strategy.
To get back to pre-covid ( c. £2 ) it needs to rise 5000%.
Put your £60 on a number at the casino ( NFA 
)
Iv just been on a cruise and lost 130 in 3 hours at that casino. Roll of the dice .
Any idea what peartrees average is at Neil .
I don’t think it is possible to know that, the fund publishes its top 10 holdings, and more information is probably available to investors, Cineworld isn’t currently in this top ten. It probably was at one stage.
https://peartreefunds.com/foreign-value-fund-ordinary/
Existing lenders have put up $1.9bn in additional lending which the US bankruptcy court has authorized access to part of, I would be surprised If pear tree isn’t in that group.
Moshe Greidinger and Israel Greidinger own about 20% currently but I’ve not seen the terms of this additional financing, dilution is highly likely.
Wish i waited a week or 2 .
Volatile stocks be Volatile.
The company has secured a debtor-in-possession financing facility of almost $2bn from its lenders, which include US investment managers Invesco, Eaton Vance, and State Street.
No mention of Peartree in the ‘debtor-in-possession’ lenders.
A deal to reduce the group’s debt and lease liabilities, which amounted to almost $9bn at the end of 2021, would “result in very significant dilution of equity interests in the group”, said Cineworld, warning that “there is no guarantee of any recovery for holders of existing equity interests”.
ELI5 - Don’t buy this stock thinking you’re doing anything other than gambling. The lenders are likely taking control of the company and wiping out shareholders.
Lenders are NOT taking control of the company, that is catagorically wrong and not what is happening.
From the DIP statement:
“The group chapter 11 companies will remain in possession and control of their assets, existing management and the board of directors will stay in control of the business and the group’s operations will be allowed to continue uninterrupted.”
I repeat what I said earlier, this is a high risk investment - its not ‘gambling’ but anyone who is not comfortable with the level of risk involved should stay clear - it is entirely possible any investment could be completely wiped out. As always, anyone investing NEEDS to do their full research.
Personally, I see a potential upside. Others dont. Its not for anyone to tell anyone else whether to invest or not, but at least be factual in what you say.
That’s why I said
They are providing up to $2bn in funding to a company in chapter 11, there isn’t an interest rate high enough for them to lend at.
20% is the interest rate as announced by the court at the time to recognise the risk to lenders.
Just be factual instead of posting nonsense
I don’t know how much Cineworld stock you own but you’re sounding very sensitive given that this is a horribly run company in a dying industry. I have never and will never own Cineworld but to suggest I’ve been posting nonsense is a little harsh.
