Thursday, August 27, 2009

August 28, 2009: Two Horror Movies, and Woodstock

OK, this is the kind of weekend August is famous for: a dumping ground for movies the studios don't know what to do with. Going against the counter-programming grain, the two big studio movies being released this weekend are both horror flicks. Isn't there a bad teen sex comedy sitting on a studio shelf somewhere? The other release takes advantage of the 40th anniversary of Woodstock, because of course there is always a shortage of Baby Boomer nostalgia in the world. The 60's! Again! Since there are still Baby Boomers alive, their youth is still being marketed to them. And the rest of us still have to live through it.

Question of the day: Why do we keep seeing sequels to a movie called "Final Destination"? Wasn't it "final" the first time? Apparently not, because "The Final Destination" (FDES4) (maybe the addition of a definite article means that it really is finished?) is the fourth in the franchise. Since I barely knew there was a franchise, I'm probably not the best person to comment on its BO potential. But the numbers are mostly good: it's on the requisite 3,000+ screens, the stock has been rising very steadily, to H$54, and the call (FD4CA) is up to H$3.56, against a strike price of H$20. The put (FD4PU) is below the magic price of a buck, so options traders are very optimistic about this one. I have no idea what critics think, because there is so far a grand total of one review on Not terribly surprising that it hasn't been screened for critics. Just based on the numbers, let's bet lots of teenagers will want to see their fellows whacked creatively.
Stock: Long
Call: Long
Put: Short

The Final Destination trailer in HD

It's hard to add another layer of artificiality and superficiality to a horror movie sequel, but someone just pulled it off: Halloween 2 (H2) is the sequel of a remake. Got that? Rob Zombie is finding ways to postpone any kind of original thinking in terms of character or setting. Just keep that franchise going any way you can! I can't wait for the "reimagining" of the remake of the sequel to the remake, which had lots of sequels. Oddly enough, this one is being released two months before Halloween. Marketing 101, anyone? Or would releasing the 53rd or whatever variation on the theme of Halloween on the actual day be just a little too cliched? Maybe we shouldn't think about it. The stock reached a high a few clicks above Final Destination, H$61, but has since drifted lower than its competition, and is down H$3 for today, to H$49. The call (H2CA) is close to H$4, but down a smidgen today. The put, however, is floating another smidgen above the IPO price, currently at H$2.13. So some traders are pessimistic. It's on roughly 3,000 screens, but there are even fewer critics at, and fewer than 1, of course, equals zero. Sigh. There are only so many horror movie fans in the world, and the numbers suggest that they are going to be going to The Final Destination. It is in 3D, maybe blood coming out of the screen will make a difference. Releasing a movie called Halloween before Labor Day strikes me as a little too proactive.
Stock: Short
Call: Short
Put: Long

Halloween II

Ang Lee has made a movie about Woodstock, "Taking Woodstock," (WDSTK) presumably because he believes that the 400,000 people who were there have not told their stories often enough to the several hundred million people who weren't, but who wish they had been. The trailer is charming, the cast is solid, and Ang Lee is a great director. But I have no interest. Maybe there are some Baby Boomers still hung up on their youth, but it doesn't look like they play HSX: the stock is tanking, down from a high of H$22 to H$17 today. The call (WDSCA) is following a similar trajectory, at H$2.39, against a strike price of all of H$5. The put (WDSPU) is around the same price. I'm shorting both, because I think the opening BO will be right around $5 million, right near the strike price, dead on between the call and put. I'm sure it will be an entertaining experience, because how could you not have fun watching one of the biggest parties ever? On the other hand, there won't be much drama, because we all know how it ended. We all know that really, really well.
Stock: Short
Call: Short
Put: Short

Update Friday morning: FDES4 is tanking, down H$3, not a good sign. H2 is up less than a buck, which is noise, and not significant. I found reviews of both movies (from Thursday midnight screenings) on Ain't It Cool News. Both movies are apparently terrible, and these reviews will have an impact. FDES4 is spectacularly bad, and H2 apparently isn't much better. The fact that they are both sequels, and one is a sequel to a remake, sends the very strong, and very wrong, signal that Hollywood is not interested in making original movies. Which is really, really bad marketing.

So I am changing my position on FDES4, shorting it, shorting the call, and going long on the put. Keeping my position on H2, and not changing anything about WDSTK, because I don't think one day is going to change people's opinions about something that happened 40 years ago.

Update Sunday night: So my original decision on FDES4 was the right one, so I feel a little stupid. It made $28 million this weekend, confirming how little I understand the appeal of these movies. My other bets were right, H2 dropped, although just H$5, and WDSTK didn't quite break $4 million.

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