First up, at least in terms of potential, is Surrogates (SUROG), a futuristic sci-fi movie about a world in which human beings interact with each other through surrogates, or robots. A terrorist wants them to reconnect through good old-fashioned human flesh. I think we've seen something like this before, at least vaguely. An allegedly utopian future which is actually dysfunctional, and robots are somehow the problem. Not high on my list. Bruce Willis stars in it, apparently because he didn't have anything better to do. Stock has dropped from a high of H$69 to the current H$51. It's opening on 2,700 screens, which is a good solid release, but not as wide as possible. There are only 2 reviews on rottentomatoes.com, which suggests that it has not been screened for critics. That's a tad surprising, and not good. The strike price is H$25 ,which is absurd for a stock with this recent history and this current price. Call (SRGCA) is H$1.22, and I am surprised it's that high, although that could be because trading is frozen. Put (SRGPU) is at H$3.56, and even that is cheap. Comingsoon.net predicts $22 million. I think that's a little high. but $20 is certainly possible. Maybe it's even a good movie. Maybe.
Stock: Long
Call: Short
Put: Long
SURROGATES trailer in HD
Next up is a remake of a movie that went on to become a TV show and then a theater production that toured the country for years. So there's some brand awareness for Fame (FAME). The idea is certainly a known quantity; it's an excuse to see lots of hot young people gossiping, crying, fighting, flirting, and occasionally singing, dancing and having a great time being highly talented young people in New York. This stock has dropped as well, from H$45 to H$35. Strike price is H$15, not unreasonable. Call (FMECA) is at H$2 and change, while the put (FMEPU) is below H$2. It's going out on 3,000+ screens, and the studio (MGM) desperately needs a hit. But the reviews are savage, with only 25% on rottentomatoes.com. I found this tidbit interesting: the screenwriter has disavowed the movie. Things that make you say "Whoa!" Haven't heard that in a long time. In 1981, when the original came out, there weren't a lot of opportunities to see young people signing and dancing and gossiping. We don't have much lack of that these days.
Stock: Short
Call: Short
Put: Long
(Video is not currently available, I'll post it when it is).
Finally, Pandorum (PNDRM) is another futuristic sci-fi thriller (I know, "futuristic sci-fi" is just about redundant) about two guys on a space ship. They make a discovery that "could threaten the existence of mankind." Of course they do. What other plot twists would even interest moviegoers these days? Once again, it's tanking, from H$30 to H$20. Strike price is H$10, and, again once again, what seemed reasonable three weeks ago is now ridiculous. It's not going to make $10 million this weekend. Traders have realized this; the call (PNDCA) is below a buck, while the put (PNDPU) is above H$3. It's on 2,400 screens this weekend, and I think many of those screens are going to be very empty. It's not being screened for critics, but that makes perfect sense for this one. There are no reviews on rottentomatoes.com. $6-$7 million.
Stock: Short
Call: Short
Put: Long
The September Slump continues, all three stocks adjusted down. SUROG did $15 million; not bad, but not good for a Bruce Willis action movie. FAME managed $10 million, barely avoiding the "bomb" territory, but also avoiding the "hit" territory. PNDRM did land squarely in bombsville, with a grand total of $4.4 million. I got almost all of my predictions right (8 out of 9!), I missed SUROG, but that only adjusted down H$5, so not a big miss. The one thing I did miss, which was not good, was actually adjusting my positions on HSX to match my predictions; I had gone long on all of these before, and was planning to change that after my analysis. But HSX had technical trouble, and I was called in to work on Thursday night, so I didn't have a chance to change. I worked until 1:00 am, and then slept in past 10, so I didn't get to short everything Friday morning. Gotta pay more attention to that alarm clock on Friday mornings.
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