Wednesday, July 29, 2009

First Post! - HSX Week of July 31, 2009

This is my first post on my new blog, That stands for Talented Earthquake Productions - Hollywood Stock Exchange. This is a blog about HSX, written by me, John Halbert. Talented Earthquake Productions was the name of my radio show in college, on WSRN, 91.5 on your FM dial, "radio that really shreds."

The purpose of this blog is to provide weekly advice about upcoming movie openings. That's it. I don't do long-term analysis, I don't look at IPO's, and I don't do bond charts.

But I do forecasts for the weekend. This one looks like a bit of a slow one. No summer blockbusters this weekend. First up is Aliens In The Attic (ANATC), a family sci-fi comedy about a group of aliens who invade a family's summer cottage. This looks about as deep as a Family Circus cartoon. But it should be fun for kids. The stock is at H$39 after a mostly upward trend, so that looks good. The strike price is optimistically set at H$15, and it doesn't look like it will have an opening weekend above $15 million. The call (ATCCA) is naturally trading quite low, currently at H$0.39, one of the lowest prices for a call I've seen in a while. The put (ATCPU) is trading around H$2, which makes sense. There isn't a lot of room for the put to sink, because it looks like this movie will make around $12 million this weekend. estimates that it will be released on 3,100 screens, so the studio seems to have some faith in it. There are no reviews as of yet on That might be a bad sign, because it might mean that the studio has not screened it for critics. Occasionally studios do that when they are worried that critical reaction will be so bad that it will have a strong negative influence. So that's something to watch for. I have to admit I liked the trailer. The price of the call is so low that I am going to go long, just on the off chance that it does better than H$15. It's a trivial cost, with a good possible upside. Like buying a penny stock. I am, however, already short the call at the IPO price, so I'm hedging.
Stock: Long
Call: Long (but only at this price)
Put: Long

Next up is The Collector (COLCT), a movie I had barely heard of before writing this post (although I do won 50,00 shares long). It's from Project Greenlight 3, which isn't a great sign, but the third iteration might be a good thing. It's a wide release (1,500 screens), but with no options, apparently because it IPO'd just two weeks ago. So apparently HSX didn't have time to plan for the options. That would mean that it's being released in a hurry, with little advance planning. Which might explain the lack of marketing. Still, the stock has risen consistently in those last two weeks, to H$14. Again, no reviews on So there is very little to go on except the stock price. Watch this tomorrow morning.
Stock: Long

The blockbuster-hopeful of the week is Funny People (FUNYP), starring Adam Sandler, Seth Rogen and Leslie Mann, directed by Judd Apatow. That should be a recipe for comedy gold, but the stock has tanked of late, way, way down from a high of H$120 to H$89 today. Looks like a classic case of an overhyped movie. Honestly, I don't see much humor in the trailer. The strike price is rather modestly set at H$30, so HSX could see the fall coming. I have a rule against shorting a call if there is a possibility of the opening going substantially above the strike price, which is the case here. First, the stock is highly volatile, and, second, I don't want to underestimate either Adam Sandler or Judd Apatow. Many people must be thinking like me, because the call (FUPCA) is at almost H$5. The put (FUPPU), however, is also doing well, at just above H$3. Seriously mixed signals we're getting here. The strike price for the Blockbuster Warrant (BWFUN) is H$100, and it's in positive territory, although not by much, at H$8. It is, of course, getting a nice wide release, on 3,000 screens. It's doing surprisingly well among the critics, and is at 71% on I'm just not comfortable with the pitch - I don't really have a sense of what this movie is about or how a movie about a guy who almost dies of a terminal disease is supposed to be funny. It sounds like Sandler and Apatow are growing up, which can only be a good thing, but that's also occasionally a painful thing.
Stock: Short
Call: Long
Put: Long

Update Friday morning: I'm posting this just after 10:00 AM Pacific time, a little too late to make any final adjustments (stocks that are opening today [and their options] halt trading at 10:00 AM Pacific). Still, I wanted to update these predictions. FUNYP is down slightly this morning, not really a surprise, and not really a strong signal either way. That kind of movement is mostly noise. It's down slightly at to 66% the last time I checked. When checking on, it important to look at the substance of the reviews. How positive are the "fresh" reviews, and how negative are the "rotten" reviews? If a movie is fresh and reviews are glowing, with even the rotten ones expressing some positive sentiment, that's a strong signal. With this one, however, even the fresh reviews are very soft - they seem to say that's it's not a great movie, but it's not bad, so we'll give it a "fresh" rating. So this is a weak 66%. I'm still not optimistic about it. At the end of the day, a movie has to answer one question in a potential ticket-buyer's mind: will this be worth $10 (or more) of my money, and 2-4 hours of time? I don't see that here - I don't see any "hook" that will get audiences in. There will be a certain number of people who will see it because they are Adam Sandler/Judd Apatow fans, and there will be a certain number who will see it because they want to see a movie, and this looks like the best for them. But to make $30 million this weekend, it has to bring in the people who are wavering, and who have to be convinced. I don't see that happening.

ANATC is down substantially, more than H$3, a worrying sign. However, it's also possible that this is more noise - it's gone up quite a bit recently, so profit-taking is normal. I must admit to a mistake in my calculations, however. I predicted it would make $12 million this weekend, but when long with a price of H$39. But a $12 million weekend would translate into a price of about H$32. So I should have shorted it.

Not a good weekend at the movies, all three adjusted down. FUNYP was the biggest loser, dropping H$23. ANATC, as I almost guessed, dropped, only bagging $7 million and change. Good luck with the career, Ashley. COLCT didn't meet its very low expectations, so it dropped, but it didn't have far to go, so it only lost about H$3.

There were 7 securities up for grabs this weekend. I missed out on two of the stocks, but I nailed all 4 of the options (I'm not counting my hedge on the call for ANATC), so I got 5 out of 7, plus the Blockbuster Warrant for Funny People. Not bad, could be better.

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