First up is Astro Boy, (ASBOY) based on a Japanese cartoon. I know next to nothing about this cartoon. I'd never heard about it before. I haven't seen any marketing besides the trailer, but since I am several steps removed from the target demo, that is not surprising. What I do know is that the stock is tanking. It reached a high of H$57 earlier this year, was at H$57 earlier this month, and is currently down to H$32. That's a precipitous drop. So this boy can fly - and that's special because . . . ? I also just noticed that the IPO date was Oct. 11, 1999. So this stock has been around for ten years. Talk about development hell. Strike price is H$15, very high for this stock price. Call (ASBCA) is at H$2.65 and dropping, while the put (ASBPU) is going the opposite direction, and is at H$2.52 . It's going out of 3,000 screens, but I don't think that's going to do much good. It's well with critics, with a 70% rating on rottentomatoes.com, so that is something to consider. So it might surprise on the upside, but I doubt it. It is trading very differently on cantorexchange.com, and that is a strong counterindicator. But I would be surprised if it does more than $12 million.
Stock: Short
Call: Short
Put: Long
Cirque du Freak is another movie based on a popular children's movie, and, like Astro Boy, I've never heard of it. Also like Astro Boy, the stock (VAMPA) is tanking, down from a recent high of H$41 to H$22. The strike price is H$10, which is a little more reasonable, and the call (VAMCA) is trading high, almost at H$3. The put (VAMPU), however is also above H$2, although only about a quarter above. It's going out on 2,700+ screens, but the critics are savaging it, with only 25% on RT. It's marginally higher on Cantor, but only about $30. That sounds realistic. Vampire fans have lots of material to choose from these days. I think $9-10 million is about right.
Stock: Long, but only because it's down so far already
Call: Short
Put: Short
Saw 6 (SAW6) is the latest entry in this particular horror franchise. Every other studio must have a lot of respect for Lionsgate, because most of them released their other horror movies well before this one. Stock is at H$71, near its high. Strike price is at H$30, which is about right for this franchise - that's where several of the last of these movies have debuted. But the call (SA6CA) is above H$3. That doesn't sound right, because franchises like this eventually wear out their welcome. The put (SA6PU) is also going up, aiming at H$3. I'm sure it's going out on lots of screens. Yep, 3,000+. But it also has competition; Paranormal Activity is still at the beginning of its hot streak, and that could take lots of business from this movie. I have no idea what critics think of it, because there are no reviews on RT. That would be because it hasn't been screened for critics. Never a good sign, although it probably doesn't matter much this time around. This is a twist: the price on Cantor is way below the price on HSX. That's different. It's around $60 on Cantor. So HSX is predicting $26 million, Cantor around $22 million. I'm thinking somewhere around $22-25 million.
Stock: Short
Call: Short
Put: Long
To round out the weekend, there's the heartwarming tale of Amelia Earhart, "Amelia" (AMELA). The stock is tanking, it's down to H$18, from a high of $42, and the critics are not impressed (30% on RT). Strike price is H$10, with the call (AMECA) barely over a buck, and the put (AMEPU) is soaring, like the legendary aviator herself. It's only going out on 800 screens. It's at roughly the same price on Cantor, in the low $20's. But I think all those signs are wrong. This is one time I am betting strongly against the market. This is the second biopic of a famous 20th century woman, played by a multiple-Oscar winning actress, this year. The other was Meryl Streep in Julia & Julia. That was a solid movie, although I didn't care for the part with Julie Powell; I though it was very badly written. That did quite well, and it may be a better movie than this one. But for all her charm and sense of adventure, Julia Child was still playing around in the kitchen. Amelia Earhart took risks that no other woman had ever taken. In terms of an inspiring story, she has few equals. I think Hillary Swank is perfectly cast. There are people out there who will see this movie, and not another movie for months. It doesn't really matter how good it is; it just has to be decent. It may very well be a maudlin tearjerker. But it is also a one-of-a-kind movie. It's the only movie about her that I know of. So I am going all in.
Stock: Long
Call: Long
Put: Short
Another interesting weekend at the box office. I got a couple of things right: I nailed ASBOY ($7 million) and SAW6 ($14 million), getting all three right. Both of those adjusted down. I was wrong about VAMPA ($6 million) and AMELA ($4 million), because both of those adjusted down, as well. I was right about VAMPA's call, and that put me above .500 for the weekend - I got 7 out of the 12. Most fortunately, I got the big one right - SAW6 only pulled in $14 million, and adjusted down by H$30.
There were a couple of great lessons learned this weekend. First, the quality of a film really does matter - AMELA got bad reviews, and that was reflected in the box office. I'm not a big fan of Mira Nair, and I should have taken that into account. Second, this whole business of "branding" movies, i.e., making movies either as part of a franchise or based on other works, is not going so well. Three of the four movies this weekend fit that definition. SAW6 is, obviously a sequel. ASBOY is based on a decades-old cartoon. VAMPA is based on a series of kids' books. The fourth movie, meanwhile, is based on a famous person's life. In other words, there is not an original idea among the four. The one movie that was based on an original idea - PNACT - swamped them all, taking $22 million. I've said it before, and I will say it again: the best way to make money in the movie business is to make a good movie. Period. End of story.
Another lesson, more of a reminder, really, for me, was that each movie has to be considered mostly on its own merits. I have to put myself in the shoes of a hypothetical moviegoer - would I pay $10 to see this movie?
The very last lesson from this weekend is that screen counts count - AMELA only opened on 800 screens, which I am sure depressed the box office. It was also not a strong sign from the studio.
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