Cineplex convertible | General financial discussion | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

No permission to create posts
sp_Feed Topic RSS sp_TopicIcon
Cineplex convertible
July 17, 2020
7:31 am
Bud
Member
Members
Forum Posts: 1183
Member Since:
February 20, 2018
sp_UserOfflineSmall Offline

Cineplex Cineplex convertible debenture/bond matures 2025 pays 5.75% annual can convert anytime into $10.94 per Common Share. Shares currently 8.8 debenture/bond matures 2025 pays 5.75% annual can convert anytime into $10.94 per Common Share. Shares currently 8.8. Is the collateral secure? they own some real estate undervalued?

July 17, 2020
9:13 am
Kidd
Member
Members
Forum Posts: 610
Member Since:
February 27, 2018
sp_UserOfflineSmall Offline

Bud. I honestly don't know.

Ask yourself, are you going to a movie theater anytime soon? Ever again? Is Hollywood going to start making movies in 2020... 2021? VOD (video on demand) is that the new at home movie experience? "Greyhound" with tom hanks, was released last week straight to vod. So was charlize theron's "the old guard"

Some believe, on the cusp of bad news is when you dive in. Others say keep your powder dry.

https://globalnews.ca/news/7188054/cineplex-movie-threatre-staff-layoffs-canada-usa/

July 17, 2020
12:38 pm
Bud
Member
Members
Forum Posts: 1183
Member Since:
February 20, 2018
sp_UserOfflineSmall Offline

"Cineplex says it is confident its business will recover from the COVID-19 closures" Bnn

July 17, 2020
12:59 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3593
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

For me, it's an "avoid," only because I do fear about the long-term impacts of COVID-19 on the film production, distribution, and exhibition industries, and because of my experience with being exuberant on the stability of the yellow pages business. Yellow Media Limited, or whatever it's called now, was subsequently recapitalized outside of CCAA under a normal CBCA process, that resulted in existing common shareholders receiving 1 share for every 250 shares they held. I held 265 shares, and because there was no fractional payout on the other 15 shares, it was effectively a 1-for-265 reverse share split for me. Suffice it to say, it's been my worst performing investment. I still hold it because it's worth less than the $9.99 trading commission (it would cost me more money to sell it). sf-cool

You're asking about a convertible debenture in Cineplex; my example is still relevant because YLO.UN debentureholders still took major haircuts and losses when their debentures were converted into common stock in the above-quoted recapitalization transaction.

Cheers,
Doug

July 17, 2020
2:01 pm
Londonguy
Member
Members
Forum Posts: 478
Member Since:
May 27, 2016
sp_UserOfflineSmall Offline

Doug said
I still hold it because it's worth less than the $9.99 trading commission (it would cost me more money to sell it).

I've had a dog or two like that in my day. Not sure if all the discount brokers do this, but TDDI will let you "donate" your permanently worthless shares to them at no transaction cost so you can get them off the books. The process also creates a formal paper trail in support of you claiming the loss, which, while not absolutely necessary for CRA purposes, does make your records look tidier

July 17, 2020
5:38 pm
savemoresaveoften
Member
Members
Forum Posts: 442
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

Cineplex is basically junk bonds and 4 years at 5.75% simply not enuf premium to justify the risk in my mind.
I rather buy some Cad banks share to earn 5-6% which I consider much safer (assume you can wait it out if it trades lower and takes longer to recover).

Never believe what management says, unless they say their survival is in question, thats when you can trust it 100%.

July 17, 2020
5:40 pm
savemoresaveoften
Member
Members
Forum Posts: 442
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

Cineplex is basically junk bonds and 4 years at 5.75% simply not enuf premium to justify the risk in my mind.
I rather buy some Cad banks share to earn 5-6% which I consider much safer (assume you can wait it out if it trades lower and takes longer to recover).

Never believe what management says, unless they say their survival is in question, thats when you can trust it 100%.

Londonguy said

Doug said
I still hold it because it's worth less than the $9.99 trading commission (it would cost me more money to sell it).

I've had a dog or two like that in my day. Not sure if all the discount brokers do this, but TDDI will let you "donate" your permanently worthless shares to them at no transaction cost so you can get them off the books. The process also creates a formal paper trail in support of you claiming the loss, which, while not absolutely necessary for CRA purposes, does make your records look tidier  

it may be 99.9999% sure that they are worthless, but I still wont "give it away for free"

July 17, 2020
8:47 pm
AltaRed
Member
Members
Forum Posts: 1263
Member Since:
October 27, 2013
sp_UserOfflineSmall Offline

As far as I know, brokerages will only charge commission equal to proceeds. Was the case for some penny stock spouse held.

Example: Net proceeds $4.13. Commission $4.13.

Have to get crap like that off the books.

July 18, 2020
7:40 am
Londonguy
Member
Members
Forum Posts: 478
Member Since:
May 27, 2016
sp_UserOfflineSmall Offline

savemoresaveoften said
it may be 99.9999% sure that they are worthless, but I still wont "give it away for free"  

It's not about giving something away for free, it's about closing out the trade so you can make use of the tax loss, which can be worth a lot. And if the pig has been delisted (highly likely), there's no way to sell it conventionally, so the donation process is a substitute mechanism that lets you formalize the disposition and thereby bulletproof your tax loss claim

July 18, 2020
2:04 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3593
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

AltaRed said
As far as I know, brokerages will only charge commission equal to proceeds. Was the case for some penny stock spouse held.

Example: Net proceeds $4.13. Commission $4.13.

Have to get crap like that off the books.  

Oh, that'd be alright if they still did that, thanks @AltaRed. 🙂

At least they don't make you cough up more money to cover the shortfall in the trading commission. 😛

Cheers,
Doug

July 18, 2020
2:54 pm
Norman1
Member
Members
Forum Posts: 3710
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Londonguy said

It's not about giving something away for free, it's about closing out the trade so you can make use of the tax loss, which can be worth a lot. And if the pig has been delisted (highly likely), there's no way to sell it conventionally, so the donation process is a substitute mechanism that lets you formalize the disposition and thereby bulletproof your tax loss claim 

That's not necessary. One can file a special deemed disposition election under Income Tax Act subsection 50(1) once the company has filed for bankruptcy or insolvency. Taxtips.ca: Worthless Shares or Debt has the details.

July 18, 2020
3:29 pm
Norman1
Member
Members
Forum Posts: 3710
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

Bud said
Cineplex Cineplex convertible debenture/bond matures 2025 pays 5.75% annual … Is the collateral secure? they own some real estate undervalued?

There's no collateral now or in the future for the 5.75% convertible unsecured subordinated debentures. Even trade debt (like their advertising bills) have priority:

Rank and Subordination

The Debentures will be direct, subordinated, unsecured obligations of the Company and will rank equally with one another and subordinate to all liabilities of the Company (including all trade debt), except liabilities which by their terms rank in right of payment equally with or subordinate to the Debentures, and will rank pari passu to all future unsecured subordinated debentures issued by the Company. The Indenture setting out the terms of the Debentures will not restrict the Company or its subsidiaries from incurring additional indebtedness or from mortgaging, pledging or charging its properties to secure any indebtedness or liabilities.

July 18, 2020
6:08 pm
AltaRed
Member
Members
Forum Posts: 1263
Member Since:
October 27, 2013
sp_UserOfflineSmall Offline

Doug said

Oh, that'd be alright if they still did that, thanks @AltaRed. 🙂

At least they don't make you cough up more money to cover the shortfall in the trading commission. 😛

Cheers,
Doug  

I would check first with one's specific brokerage. Can only say that RBC DI does this per spouse's experience.

July 18, 2020
6:10 pm
Doug
British Columbia, Canada
Member
Members
Forum Posts: 3593
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

Norman1 said

Bud said
Cineplex Cineplex convertible debenture/bond matures 2025 pays 5.75% annual … Is the collateral secure? they own some real estate undervalued?

There's no collateral now or in the future for the 5.75% convertible unsecured subordinated debentures. Even trade debt (like their advertising bills) have priority:

Rank and Subordination

The Debentures will be direct, subordinated, unsecured obligations of the Company and will rank equally with one another and subordinate to all liabilities of the Company (including all trade debt), except liabilities which by their terms rank in right of payment equally with or subordinate to the Debentures, and will rank pari passu to all future unsecured subordinated debentures issued by the Company. The Indenture setting out the terms of the Debentures will not restrict the Company or its subsidiaries from incurring additional indebtedness or from mortgaging, pledging or charging its properties to secure any indebtedness or liabilities.

  

Thanks, Norman. That's useful information for contextualizing terms like trade debt, too.

Also, regarding Bud's original question on Cineplex' real estate, I suspect most of it is leased, as is commonly the case among movie theatre rental chains (at least in Canada).

The Empire theatres, which were sold, principally, to Cineplex and Landmark Cinemas may be an exception to this in that they may have been owned by the theatre chain. I don't see them listed on the Crombie REIT website, so it's possible Cineplex and Landmark may have some owned real estate, but in any case, they would require major redevelopment. (The Paramount theatre in downtown Kelowna was, sadly, closed a number of years ago, sold, and repurposed into (a) a downtown Tim Horton's franchise and (b) a craft brewery. The Uptown theatre a few blocks over closed many years before that and was leased as, among other things, a type of church, a spirital healing centre, and some other therapeutic centre until it was demolished late last year. No idea what's planned for that spot now; probably condos.)

Cheers,
Doug

July 19, 2020
9:10 am
savemoresaveoften
Member
Members
Forum Posts: 442
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

Norman1 said

Londonguy said

It's not about giving something away for free, it's about closing out the trade so you can make use of the tax loss, which can be worth a lot. And if the pig has been delisted (highly likely), there's no way to sell it conventionally, so the donation process is a substitute mechanism that lets you formalize the disposition and thereby bulletproof your tax loss claim 

That's not necessary. One can file a special deemed disposition election under Income Tax Act subsection 50(1) once the company has filed for bankruptcy or insolvency. Taxtips.ca: Worthless Shares or Debt has the details.  

You dont have to official "remove" it from your account

Norman1 said

Londonguy said

It's not about giving something away for free, it's about closing out the trade so you can make use of the tax loss, which can be worth a lot. And if the pig has been delisted (highly likely), there's no way to sell it conventionally, so the donation process is a substitute mechanism that lets you formalize the disposition and thereby bulletproof your tax loss claim 

That's not necessary. One can file a special deemed disposition election under Income Tax Act subsection 50(1) once the company has filed for bankruptcy or insolvency. Taxtips.ca: Worthless Shares or Debt has the details.  

exactly, one can claim the capital loss without giving it away for free. 🙂

July 19, 2020
11:47 am
Londonguy
Member
Members
Forum Posts: 478
Member Since:
May 27, 2016
sp_UserOfflineSmall Offline

Norman1 said

Londonguy said

It's not about giving something away for free, it's about closing out the trade so you can make use of the tax loss, which can be worth a lot. And if the pig has been delisted (highly likely), there's no way to sell it conventionally, so the donation process is a substitute mechanism that lets you formalize the disposition and thereby bulletproof your tax loss claim 

That's not necessary. One can file a special deemed disposition election under Income Tax Act subsection 50(1) once the company has filed for bankruptcy or insolvency. Taxtips.ca: Worthless Shares or Debt has the details.  

Maybe so, but just clicking on "donate your shareholding" was a lot easier

July 19, 2020
12:15 pm
rhvic
Victoria, BC
Member
Members
Forum Posts: 365
Member Since:
May 28, 2013
sp_UserOfflineSmall Offline

Landmark Cinemas in Saanich, BC (part of Victoria) just announced they are closing permanently. One presumes covid is to blame.

Guess that tells something about investing in cinemas just now...

July 19, 2020
4:08 pm
Kidd
Member
Members
Forum Posts: 610
Member Since:
February 27, 2018
sp_UserOfflineSmall Offline

I have to say... i love movies. It's a great escape. I first saw JAWS at a drive in and i never wanted to swim in rice lake again. Yeah, great times.

Theater's make their money off the $20 popcorn and $5 candy bars. I do or did before covid go the movies at least once a month. When i first retired, every friday afternoon I'd go to the movies by myself to see a new release and i always brought my treats in with me, from walmart.

Once i got caught with a sandwich and i had to eat it or throw it out before i was allowed in, i ate it in record time. More like inhaled it.

July 19, 2020
5:32 pm
Bud
Member
Members
Forum Posts: 1183
Member Since:
February 20, 2018
sp_UserOfflineSmall Offline

I bet the feds will throw some candy at them and Indigo under the guise of "canadian content" if they run short.

July 20, 2020
7:07 am
savemoresaveoften
Member
Members
Forum Posts: 442
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

Bud said
I bet the feds will throw some candy at them and Indigo under the guise of "canadian content" if they run short.  

Dont think JT's purse string is THAT loose.

No permission to create posts

Please write your comments in the forum.