Let's get the cheesy horror movie out of the way first. This week it's called "A Perfect Getaway (PGETA)," and features beautiful scenery as well as beautiful people - it's set in Hawaii. It's a decent B or C list cast (Milla Jovovich, Steve Zahn). Could be fun. I have no idea, since I don't watch these kinds of movies. The stock is right near the high after moving up quite well over the last couple of months. It's still only at H$22.75. Boxofficemojo.com is estimating the theater counts at about 2,000 (precise counts are updated Thursday afternoons), which sounds right. It's at 50% on rottentomatoes.com, with only 10 reviews. The critics are saying what I expected; it's OK, don't expect much and you won't be surprised. Strike price is H$10. That feels a little on the high side, but $5 would have been laughably low, so that works. With the stock predicting about an opening weekend of around $8 million, the options are not hard to figure out. The call, of course, is down to about H$1 (PGECA), while the put is at almost H$3 (PGEPU). I don't think this will bomb, but I would be surprised if it sees box office above $9 million.
Stock: Long
Call: Short
Put: Long
We also have another blockbuster wannabe, General Infantry Joseph, or G.I. Joe (GIJOE), as is his nom de plaything. This certainly looks like fun. I have to admit that I have watched the trailer several times. It's efficient, well-edited, and strongly suggests that the action is very well photographed, with lots of great slo-mo scenes. Looks great! Doesn't sound so wonderful - this may be one of the few trailers in which the dialogue consists almost entirely of action-adventure cliches:
"The mission is a go!"
"I want in."
"A team is being assembled."
"I want the warheads ready to launch in one hour."
"This has just begun."
Dennis Quaid plays General Hawk. Of course he plays "General Hawk." He's not going to be playing "Colonel Pigeon." Channing Tatum is also in it, apparently playing Mr. Joe himself. The stock has been extremely volatile, crashing badly in the last couple of months, although it has regained some momentum of late. It's at H$144, which predicts an opening weekend of about $53. HSX positioned the strike price a little better than it did for PGETA. The options, interestingly, are almost exactly mirror opposites of each other, which is highly unusual. The call (GIJCA) is above H$4, as is the put (GIJPU). Critics are taking it for what it's worth - eye candy, with enough substance and plot not to insult the intelligence of the average teenager. It's at 75% on rottentomatoes, with 16 critics. I've heard rumors that it isn't been screened for critics, which would not be a great sign, but it looks like there are some who got to see it somehow. Critics aren't really going to matter much. The LA Times pointed out that Paramount is marketing this very heavily to "middle America," i.e. guys in the heartland who watch NASCAR. It's a patriotic thing. I'm going to assume that they know what they're doing. It's going out on oodles of screens, roughly 3,500. It feels odd to write this, but a $50 million opening weekend is almost diminished expectations. It's certainly nothing like what Transformers 2 did. The gadgets look cool, the men are buff, the women are hot, and the good guys win. What more do you need?
Stock: Long
Call: Long
Put: Short
Note: I reversed positions on Friday morning, so my positions are now this:
Stock: Short
Call: Short
Put: Long
G.I. JOE trailer in HD
And now we come to art. Finally, a movie about a women who is a spy! Well, Julia Child was a spy (she worked in the Office of Strategic Services, predecessor of the CIA, in WWII), but she was, of course, famous as the woman who introduced America to French cuisine. Like they say, it's a dirty job, but somebody's got to do it . . .
Julie and Julia (JULIE) is one of the best examples of counterprogramming in a long time. Talk about a chick flick. It stars the queen of modern cinema, Meryl Streep, and one of the up-and-coming princesses, Amy Adams. The one problem is that it is directed by Nora Ephron, who is one of my least-favorite directors, in part because I think she completely botched Bewitched. Nicole Kidman as a silly wimp? That was just so wrong. Well, here's hoping she gets this one right. The stock has been on a tear, and today is at H$56, just down from its high. Teenage boys won't be interested in this, but women of a certain age certainly will. Options are nicely positioned, with a strike price of H$20. The call (JULCA) is doing well at $H2.52 and a half, but that's down almost H$1. So some optimism has faded a bit. The put (JULPU) is above H$3, so that H$20 strike price is looking endangered. Critics are moderately excited, with 64% giving it a fresh rating,l although none are wildly enthusiastic. I'm expecting a solid, comfortable movie, and that's what the critics are telling me. It will probably be on about 2,500 screens, easily enough for the non-G.I. Joe fans to see it any time they want.
Easily the best thing about this movie is that the marketing is a no-brainer. Dozens of action-adventure and horror movies are out there in the culture, with more and more being released every month. But there is and will be only one movie about a woman cooking every one of Julia Child's 524 recipes, and that movie stars Meryl Streep, Stanley Tucci, and Amy Adams. Even if I think Nora Ephron could use some help in the movie-magic department, her heart's in the right place. Sometimes passion makes up for skill. Julia Child is a little like Walter Cronkite and, in a weird way, Michael Jackson - a creature of television, fortunate enough to come along when it was still possible to be on TV and be one of a kind. She was 6' 2". She towered over most men. I don't think she'll tower over the men this weekend, but I expect some pleasant surprises. $25 million might be a bit much, but $22-23 sounds right.
Stock: Long
Call: Long
Put: Short
Update Friday morning: All three are down today, and they are down by enough to make me question my optimism. I am reversing position on G.I. Joe: The Rise of Cobra, because I don't think Cobra is going to rise all that well. The reviews are trickling in, despite the movie not being screened for critics, and they are pretty bad. To make its numbers, this movie would have to expand beyond the teenage boy fanbase, and I'm not sure it's going to do that.
However, I am staying long on the other two. I still think Julie and Julia is a unique cinematic proposition, and Perfect Getaway doesn't have a lot of room to sink. There's not a lot of downside potential, just because the stock is already fairly low, but there is still some upside potential. If it turns out to be a good opening weekend, the stock might adjust upwards nicely, but it probably won't adjust downwards all that much if it sinks. So there is more potential for losses shorting it.
Update Sunday night: Looks like my first instinct on GIJOE was the right one: It opened with $56 million, which means I would have done well with my original predictions. Lesson of the day is do not reverse positions unless the signal is really, really strong on Friday morning. I did, however, get JULIE right; it came in at $20.1 million, almost exactly the strike. I could have made more money if I had shorted the call on JULIE, but my rule is that I count it as correct if the position is right, even if the amount is off. PGETA didn't even meet its very low expectations, but I got the options right. So I got 5 out of 9 this weekend, but I missed the big one, which was GIJOE.
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