We have an interesting assortment of movies this weekend. No more summer blockbusters, but all solid possibilities for entertainment. There might even be an Oscar nomination in here somewhere.
First up is Cloudy With A Chance Of Meatballs (CWCMB), one of the best titles for a movie ever, based on a children's book of the same great name. It's animated, naturally in 3-D, as so many animated movies seem to be these days, and basically destined to attract lots and lots and lots of kids. Pancakes falling from the sky? How cool is that? Way cool, if you're 7. Still fun, even if you're 70. The stock is at H$72 today, up about H$2. That's down from a high of H$84, but many stocks are down from the highs they hit in August, so that's not surprising. The strike price is rather optimistically priced at H$30. That made sense when the stock was above H$80, not so much today. H$73 predicts an opening weekend of about $27. The call (CWCCA), not surprisingly, is not doing all that well, right at the IPO price. The put (CWCPU) is, on the other hand, doing quite well, aiming at H$4. It's opening on 3,119 screens. Critics are loving it, with an 88% fresh rating on rottentomatoes.com. I think we should be prepared for a nice surprise on the up side. "Up" made $68 million on its opening weekend. It had the Pixar brand going for it, but not quite as obvious a marketing hook. This looks like a seriously fun movie. I'm going with $30 million or more.
Stock: Long
Call: Long
Put: Short
Cloudy with a Chance of Meatballs in HD
Staying in the comedy genre, but this time with real actors playing real people, we have The Informant! (INFOR), complete with exclamation point. It's the true story of a guy named Mark Whitacre, who wanted to blow the whistle on his employer, Archer Daniels Midland, and how they were messing with various markets for various things made from corn. We know what happened (although I'm not going to tell you), so there isn't a lot of suspense in the plot. But how does a story about accounting gone bad turn into a comedy? There aren't a lot of directors out there who could pull this off, but if anyone can, it's Steven Soderbergh. Matt Damon looks perfectly cast. The stock is at $32, down H$2 today, and way, way down from a high of H$47. Another victim of hype and post-August retrenchment. I've been waiting for this movie, and might see it this weekend. H$32 suggests about a $12 million opening weekend. The strike price is above that, at H$15, but the call (INFCA) is holding up, above the IPO. The put (INFPU), however, is doing better, above H$3. It's opening on 2,505 screens, scoring well on rottentomatoes.com (67%), and has some good marketing hooks, including a famous director and well-respected actor. But still, it's not the easiest movie to sell. I'm looking for the sweet spot between the options, somewhere around $12-14 million.
Stock: Long
Call: Short
Put: Short
As usual, I don't know how to review this next one, because it's a horror movie, and I don't do horror movies. But Jennifer's Body (JBODY) stars Megan Fox, Hollywood's latest hottie, who is actually quite hot. Following the pattern of the week, this one has dropped precipitously in the last couple of weeks. It's currently around H$40, down from a high of H$57, but up slightly today. Ms. Fox plays a girl in high school who has been possessed by a demon, and is now a real man-eater - literally. It's gotten oh-so-much buzz, being the product of screenwriter Diablo Cody's imagination (Juno), but it's also on the receiving end of a backlash or two; it's only at 34% on rottentomatoes.com. The reviewer from horror.com, however, loved it, which has to be a good sign. It's on 2,701 screens, not the widest possible release, but solid. The call (JBOCA) has been on a roller coaster, as much as it could be one on in a week, way up, down, and now recovering to just over H$2. The put (JBOPU) has also had ups and downs, although it is strongly in the positive, roughly H$3 and a half. The plot sounds somewhat different, at least, which is sometimes enough to keep the buzz alive. Quite the alternative take on female empowerment! Besides, most of the reviewers are adults, and this is aimed very squarely at the pre-drinking age set. I'm thinking $15-17 million.
Finally, we have a romantic comedy that looks like it has some heavy elements of a romantic drama, Love Happens (LVHAP). I don't think I really know which it is, comedy or drama, and I'm really not that interested in finding out. I loved Aaron Eckhart in "Thank You For Smoking," and I think Jennifer Aniston is attractive, but I can't say that I have ever found any of her performances inspiring. That may be because I haven't seen that many of her performances, because I haven't noticed a movie of hers that really grabbed my attention. Neither does this one. I can feel the sentimentality just oozing through the screen as I watch the trailer. Once again, the stock is down from its recent high, from H$33 to H$25, down H$2. Low expectations are being lowered. Partially by the studio: it's only going out on 1,800 screens, so Universal is looking to contain their losses. Critics are not enthusiastic, with only 23% of those posting on rottentomatoes.com finding the bright side of death and love. Strike price is very reasonably set at H$10, but it doesn't look like it will make it that high. The call (LVHCA) is below a buck, while the put (LVHPU) is floating above the IPO, at H$2 and change. There's not a lot of room below $10 million for a major studio release featuring an allegedly A-list movie star, so let's guess $7-9 million. Going for the sweet spot again.
As usual, I don't know how to review this next one, because it's a horror movie, and I don't do horror movies. But Jennifer's Body (JBODY) stars Megan Fox, Hollywood's latest hottie, who is actually quite hot. Following the pattern of the week, this one has dropped precipitously in the last couple of weeks. It's currently around H$40, down from a high of H$57, but up slightly today. Ms. Fox plays a girl in high school who has been possessed by a demon, and is now a real man-eater - literally. It's gotten oh-so-much buzz, being the product of screenwriter Diablo Cody's imagination (Juno), but it's also on the receiving end of a backlash or two; it's only at 34% on rottentomatoes.com. The reviewer from horror.com, however, loved it, which has to be a good sign. It's on 2,701 screens, not the widest possible release, but solid. The call (JBOCA) has been on a roller coaster, as much as it could be one on in a week, way up, down, and now recovering to just over H$2. The put (JBOPU) has also had ups and downs, although it is strongly in the positive, roughly H$3 and a half. The plot sounds somewhat different, at least, which is sometimes enough to keep the buzz alive. Quite the alternative take on female empowerment! Besides, most of the reviewers are adults, and this is aimed very squarely at the pre-drinking age set. I'm thinking $15-17 million.
Stock: Long
Call: Long
Put: Short
Finally, we have a romantic comedy that looks like it has some heavy elements of a romantic drama, Love Happens (LVHAP). I don't think I really know which it is, comedy or drama, and I'm really not that interested in finding out. I loved Aaron Eckhart in "Thank You For Smoking," and I think Jennifer Aniston is attractive, but I can't say that I have ever found any of her performances inspiring. That may be because I haven't seen that many of her performances, because I haven't noticed a movie of hers that really grabbed my attention. Neither does this one. I can feel the sentimentality just oozing through the screen as I watch the trailer. Once again, the stock is down from its recent high, from H$33 to H$25, down H$2. Low expectations are being lowered. Partially by the studio: it's only going out on 1,800 screens, so Universal is looking to contain their losses. Critics are not enthusiastic, with only 23% of those posting on rottentomatoes.com finding the bright side of death and love. Strike price is very reasonably set at H$10, but it doesn't look like it will make it that high. The call (LVHCA) is below a buck, while the put (LVHPU) is floating above the IPO, at H$2 and change. There's not a lot of room below $10 million for a major studio release featuring an allegedly A-list movie star, so let's guess $7-9 million. Going for the sweet spot again.
Stock: Long
Call: Short
Put: Short
In the interests of diversity and promoting independent and foreign film, and because I am intrigued by both of these movies, here are the trailers for two other movies opening this weekend, although in limited release. I don't predict opening weekend box office results for movies opening in limited release, because they don't adjust on HSX, but I like these two trailers. Bright Star is a period piece but about an intensely romantic life and story: John Keats, Romantic poet, and Fanny Brawne, the love of his very short life (he died at 25).
Dil Bole Hadippa, OTOH, is a Bollywood comedy about a woman who pretends to be a man to be able to play cricket. I had no idea cricket was so colorful or sexy.
Update Sunday night: Looks like I misread the market a bit; I thot that the slumps in stock prices among this week's openers was part of a general post-summer trend, but some of that drop-off was real, although there was only one real bomb this weekend, Jennifer's Body. Watch out for that backlash, Megan! CWCMB was the exception, opening at $30.1 million and adjusting up slightly. I got that one almost exactly right, although I was wrong about the call. Holding that long to delist. The market nailed the predictions for INFOR and LVHAP; both adjusted up less than a buck. We traders must be getting good at this or something. INFOR brought in $10 million, below my prediction. Got the call right, the put wrong on Mr. Soderbergh's latest. Again, long to delist. I got everything right about LVHAP; it brought in $8.4 million, almost exactly in the middle of my prediction, and I got both of the options right. Short to delist, because I don't think it's going to generate much buzz. Jennifer's Body, the aforementioned bomb, adjusted way down, bringing in a grand total of $6.8 million, and adjusting to H$18, down from H$37. I was completely wrong, and badly so.
Out of 12 predictions, 3 for each of 4 movies, I got 7 right and 5 wrong, but I missed the most important call of the weekend, for JBODY. Gotta remember NOT to trust my instincts when it comes to horror movies.
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