Cineworld (CINE) 🎥

Try £1.04 so pretty much sure it’s dead in water :man_facepalming:

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I bought 1900 shares up £157.00

Did something actually happen to justify the 7% rise today, or is it just people piling in after the rise last week?

Last news I read was that they lost a court case against Cineplex and so their debts are even higher than they were a month ago…

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Short squeeze. 10% of the float is being shorted, any bit of buying power is going to be create volatile upward movements.
No one knows what going to happen, but they have appealed the decision, and that process could take months-years. I have my doubts they end up needing to pay all the fine and will probably come to a settlement.

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On Sunday the Motley Fool released an article called “Will the Cineworld share price slump below 5p in 2022?”

In the article they talk about Cineworld’s financial situation and their legal case with Cineplex.

The sentence regarding the 5p reads:

Nevertheless, I think these rough numbers make it clear that the company is in a difficult position. As such, I think the stock could drop further in 2022. If it continues to lose money, or if the appeal goes against it, the stock could drop to 5p or even below this level.

Now this seems completely unfounded like they have just picked a number from the air. Of course it could happen but it also it could fall to 1p or rise to £1.

Why 5p, is it just click bait?

Fool.co.uk is 2-3 good stories buried underneath 20 click bait style nonsense. So yeah 5p is a nonsense price but what they’re basically saying is “will cinewold become a zombie companies propped up only buy the fact their lenders won’t finish them off”

I wrote a post back in September about Cineworld, the headwinds and their debt pile -

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This thread keeps getting of track and discussing the personal beliefs everyone has in the future of Cinema as a concept. This clouds the issue on £CINE as a company so here are some numbers and graphs to make me look clever -

  1. Cineworld are upto their eyeballs in debt, they’ve just had to borrow more recently (keep scrolling for more) which takes them to an eye watering $8.89bn
  2. $8.89bn is a big number but here is some context. In 2019 the last year before the pandemic affected their business they had an EBITA (earnings before interest, taxation & amortisation) of $1.46bn
  3. This would give you a DSCR (debt to coverage ratio) - or how many years it would take to pay back the debt of 6.06 . Thats over 6 years IF they pay no tax, no interest, invest in nothing AND get back to 2019 revenue.
  4. This graph below shows that as far back as 2017 they’ve basically made next to no profit. That’s without the hit to the revenue from the pandemic and the extra debt that now needs servicing.

  1. I promised it in the first point, debt has just gone up because they’ve settled a lawsuit. They purchased regal cinemas in 2017 but the shareholders weren’t happy with the price they got. So they’re paying another $170m on top of the $3.6bn they agreed.

Reuters – 10 Sep 21

Cineworld pays $170 mln to Regal investors unhappy with 2017 buyout

Cineworld , the world’s second-largest movie theatre operator, said it will pay $170 million to Regal Entertainment shareholders, who were disgruntled with the price they received when the London-listed company took over the U.S. chain in 2017.

Don’t listen to me though …

image

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Clickbait posts annoy me so much, especially as I feel some people won’t actually read them and will just react to them.

Thanks @NeilB.
A very interesting post. They’ve certainly got their work cut out for them. And the additional money they’re paying regale is ridiculous. Luckily I don’t hold that many shares and it’s more of a bit of a fun gamble outside of my more serious ETF fund investments.

Cheers
Ben

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Click bait is one of the worst things to happen in the modern era. It has always been around a bit but now even places like the Guardian do it all the time and it winds me up a treat.

Headline - Doctors/scientists/people etc say XYZ

6 paragraphs down at the end when many stopped reading - However many/most doctors/scientist/people etc don’t agree with the 1 doctor/scientist/person etc.

It is now so important to get the click that integrity goes out of the window even if the story is actually correct in facts when consumed fully. :cry:

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Is it time to pull out? :roll_eyes::thinking:

An environmental committee on a chain of cinema is a bad idea. Just when the stock started to bounce back. Why haven’t they discussed it with their shareholders (for full disclosure, i have a few shares of it). Oh and very sneaky move by CineW; memo sent at 16:30 on Friday evening. Is this bad augur?

Why do you think having an environmental comittee is a bad thing? Many companies are now trying to address their environmental impact so why shouldn’t Cineworld be doing the same thing?

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Hi Phil,

an environmental committee in itself is not a bad thing. An environmental CONmittee for a chain of CINEMA is a BAD thing compounded with the fact that some of the directors of that CONmittee who were overseeing their Canadian $1 billion loss (meaning also they have real bad business acumen) and instead of leaving the company (not to get fired); they get promoted? is this sound management.

Now, what do you think an environmental CONmittee would do to Cineworld? How would an added environmental CONmittee (by the way, salary probably paid by burning shareholders dividends) improve the environment better than what was already in place?

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No idea about the individuals, although I wouldn’t say a business loss is sufficient evidence of bad business acumen but it seems like they are doing the right thing.

Based on the screenshot it seems like they’ve gone for a high level of independence which is correlated with good CSR/ESG outcomes:

We find that the greater the CSR orientation of the board (as measured by the board’s independence, gender diversity, and financial expertise on audit committee), the more proactive and comprehensive the firm’s CSR strategy, and the higher its environmental and social performance

More independent directors also has a negative correlation with environmental violations.

Results demonstrated that the value of stock owned by corporate officers and directors was positively and significantly associated with serious environmental violations

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Since when did cinema get so complicated? Gender diversity environment just put a film on and sell some overpriced (polystyrene) and chill out :rofl: tbh this is 1 company I’d wish to stay away from chances of getting anywhere near my money back is to me non existent :-1:t2:

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Thanks for the info, Cameron.

I added a more comprehensive screenshot showing the “environmental committee”.

Renana Telerberg has worked for Cineworld for more than 20 years; now she is a member of that new environmental committee; it would qualify as a conflict of interest:

Camela Galano worked her whole life in the production and distribution of films. I am pretty sure that she needed CineWorld at one point to distribute the films she worked on. I don’t see the independence. Another conflict of interest there:

Ashley Steel was a head at KPMG for many years; KPMG had a 15 years relationship with CineWorld while Ashley was working at KPMG. I don’ t see the independence. Another conflict of interest:

I just demonstrated that ALL of the directors are NOT independent; therefore this committee cannot be independent.

And i would like to insist on this point: How would this committee improve the environment better that the system that was already in place?

Independent directors in this context just means they don’t hold shares. It’s perhaps a bit of a misleading term because you are right they aren’t neutral but the theory is that they have less of a direct link with capital return and can challenge the rest of the board.

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i looked at that cross section of committee members and i don’t see anyone challenging anyone. And they have enormous power in driving the business which will inevitably influence the capital return. The theory is good but i like to see the reality as it is but i may digress. Thank you for your input. At the end, this stock may perform very well, who knows. I am going back to my reading.

Surely a lot of countries are going to insist on such committees or persons responsible in the future, just like data protection officers are required in the EU. With the amount of countries they operate in this isn’t a massive deal and sounds like an element of future-proofing.

We also don’t know how responsible those who were in the group for the scrapped takeover were in the decision to pull out, and as there’s no takeover left to deal with, giving some of these people extra areas of responsibility sounds like reasonable move. Not sure they really consist of promotions either.

Cineworld has made some questionable decisions in the last few years. Not sure this is particularly one of them.

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