Christmas 2009: It's Complicated, Sherlock Holmes, Nine

I'm a little late posting this, since the stocks halt in the next few minutes, so this is going to be brief.

It's Complicated: Well, maybe. Sounds like an appealing romantic comedy for a group of people who normally aren't targeted by movies in this genre, i.e. people over 50. It also sounds like it's a little too formulaic, which could also turn off these people, who should be more discriminating by virtue of experience. Also, the stock has been tanking of late. Short.

Sherlock Holmes: This is another "reinvention," i.e. an updating of a franchise. I'm not sure I buy it, because I have the feeling that without Holmes' calm, understated British approach, this becomes another action adventure movie. Someone, I think the producer, described this as "James Bond in 1891." Except that we already have James Bond, and Sherlock Holmes is supposed to occupy a different place in the pop culture universe. Holmes is not supposed to be a rogue. There is supposed to be something elitist and slightly snobbish about him. He's supposed to represent the best of society - the smnartest, most responsible, most diligent - taking care of everyone. Stock is down H$6 today. Short

Nine is that rarity, a musical. The reviews have not been great, and apparently Daniel Day-Lews is not much of a song and dance man. But there are lots of seriously hot women, which should have some appeal to certain segments of the population. It's just below H$30, so I think it might be a bargain. Long.

Well, this turned out to be a heck of a weekend for the box office - biggest weekend ever. Woo hoo! I was mostly wrong, seriously underestimating the appeal of Mr. Robert Downey, Jr. and the Chipmunks. I was technically wrong on It's Complicated, but not by much, since it only adjusted up H$2. I was also technically wrong on Up in the Air, which probably got lost in the shuffle, but the studio is rolling that out slowly and deliberately, so that should still be a good one to hold long to delist. I also underestimated how badly Nine would get lost in the shuffle. No love for Mr. Day-Lewis.

December 22, 2009 (Wednesday): Up Iin the Air with Alvin and the Chipmunks

Tomorrow is Wednesday of Christmas week, a perfect time to release movies. Two are coming out, Up in the Air and Alvin and the Chipmunks: the Squeakquel.

Up in the Air (UPAIR) isn't actually being released tomorrow; it's been in limited release for about three weeks, and has already grossed $8 million. The stock climbed very steadily for a while, but has been on a roller coaster the last couple of weeks. Still, it's at H$65, not far from the high of H$73. It's expanding to a total of 1,895 screens, which isn't a very wide release. The reviews are incredible, scoring 90% at rottentomatoes, with much Oscar buzz. Of course, it stars George Clooney. And it's directed by Jason Reitman, who directed Thank You For Smoking, one of my all-time favorite comedies. But it's a comedy about people being laid off. So there's some potential downside. As far as I can tell, there are no opening-weekend options, which makes sense. The CX derivative on HSX is at H$72, fairly close to the stock. The strike price for the Holiday Warrant is H$70. Seriously? That's way low, and of course it's well above that. There are Nominoptions for Best Director, Best Picture, Best Actor, Best Supporting Actress, and Best Adapted Screenplay. Go long on all of those. On Cantor Exchange, it's at $71, which is down from the absurd high of $91 (where I shorted it). I think it will do well, but I also suspect that it will build through word of mouth. It's not an easy sell. It will adjust at a formula of [Previous Box Office + (3.0 * BO Fri-Sun)]. It's already done $8 million, and could easily do $7 million on Wednesday and Thursday. That's $15 million. To make the current price, it would have to do about $17 million Fri-Sun. Friday is Christmas, and Saturday and Sunday are the days after Xmas. So it's possible, but very much - forgive the pun - up in the air. But I love a trailer about a guy in corporate America that starts with Iggy Pop's "The Passenger," from his "Lust for Life" album.
Stock: Long
CX on HSX: Long
All nominoptions: Long
Cantor: Long




Alvin and the Chipmunks (ALVN2) are back, because the first one made a ton of money. Jason Lee is not back in the starring role as their human overseer. Sounds like a good move on his part. The stock is at H$135, down from a high of $148. Not much of a drop, but I have a gut instinct that it's going to be a precipitous drop from here. It's going out on almost twice as many screens as George & Co., but the reviews are excruciating, at 25% on RT, with several critics calling it the worst film of the year. Reviews aren't all that important for a movie like this, but when they are that savage, you have to listen to them. Strike price for Fri-Sun is H$40, which is a good price for the stock price. Call (AC2CA) is doing well, aiming at H$4. The put (AC2PU), however, is also above water, at H$2 and a half. The CX derivative on HSX is above the stock, currently H$149. Strike price for the Holiday Warrant (HWAL2) is H$150, and it's about H$14. On Cantor, it's at $144, and dropping from above $150. On IMDb, it's scoring a 3.3. Not a lot of votes, but a lot of "1's." Women seem to like it a lot more than men, but men seem to really hate it. Jason Lee probably walked away from $10 million when he passed on this, and he's a guy who could probably use another blockbuster. That says something. There's only one reason to make this movie: milking the franchise. I'm getting a bad feeling about this. I think the charm is disappearing. I'm not even going to look for Nominoptions. I like the idea of the chipmunks, but I think there was enough potential in the franchise for exactly one movie.
Stock: Short
Call: Short
Put: Long
CX on HSX: Short
Holiday Warrant: Short
Cantor: Short

Update Wednesday morning: ALVN2 is up H$3, while UPAIR is down H$5. I'm reversing my position on UPAIR, at least partially - I shorted the max on HSX, and sold half my 50,000 shares. I still think it will do well, but it's going to have to build good word of mouth. I still the expectations for the Chipmunks are a little out of whack. Also, a slight mea culpa: turns out that Jason Lee is in this movie, but just barely - he's in traction somewhere, so his nephew has to take care of the chipmunks. Which means that he was probably contractually obligated to be in the movie, but he didn't really want to, so they sort of put him in it.

December 18, 2009: Did You Hear About Avatar?

There are only two movies out in wide release this weekend, but one is one of the most highly anticipated movies of this, or the last several, years.

But first, the sacrificial lamb. That would be "Did You Hear About the Morgans?" (MRGNS), starring Hugh Grant and Sarah Jessica Parker. I like Hugh Grant, I think he was great in Notting Hill. I'm not such a fan of SJP, but I can see the two of them as a couple in New York. Makes sense to me. The problem I have with them right now is that the stock is tanking big time. Just dropping like a rock. It's going out on 2,700 screens, which is a good wide release. But it's at only 10% on rottentomatoes.com. I have a strong feeling it's being released against Avatar for a couple of reasons. One, no other studio wanted to release a movie this weekend. Two, the studio probably assumes it's not going to great business anyways, so why even try? Three, it will be easy to blame the lack of box office on the competition. The strike price is H$20, which is absurd for a stock barely breaking H$30. The call (MRGCA) is dropping almost as fast as the stock, while the put (MRGPU) is heading skyward, about H$4 and a half. The CX derivative on HSX is still above H$40, wonder of wonders, but we can probably assume that won't last long. It's also dropping on Cantor, although it's still in the mid-30's. I like the trailer, but I have a feeling that all the good jokes are in those 2 1/2 minutes.

Stock: Short

Call: Short

Put: Long

CX on HSX: Short

Cantor: Short

Now, of course, we come to the big box office draw this weekend, a little movie called Avatar (AVATR), by some guy named James Cameron, who is one of the most successful directors of all time. The expectations are through the roof, and the backlash is almost as intense, even before the movie is released. Several people have pointed out that similar predictions of doom accompanied Titanic. The stock has been floating above H$200 for a few weeks now. Strike price is H$65, which correlates to a stock price of H$175. Call (AVACA) is, appropriately, through the roof. Put is in the nether regions. It's going out on a bazillion screens. Critics are loving it, and falling all over themselves to praise it. It's at 82% on RT. Strike price for the Holiday Warrant is H$200, and that's looking absurdly low. CX on HSX is at H$277, which is way high. The Cantor derivative has been floating between $220 and $250. There are various Nominoptions. Go long on most of those.

Stock: Long

Call: Long

Put: Short

Holiday Warrant: Long

CX on HSX: Long

Holiday Warrant: Long

Cantor: Long

Update Friday morning: Avatar is up H$9, and MRGNS is down almost H$3, so it looks like people are buying the hype about Avatar. James Cameron does have a rather spectacular track record. Morgans looks like a bunch of jokes in search of a plot. I have a feeling that is going to turn off most demographics. East Coast elites will get some of it, but they might also not appreciate being made fun of. Meanwhile, people in the heartland might be offended by the stereotypes of down-home folks with guns. I'm also not sure how it resolves. Are they going to fall back in love? So keep the short on that one.

Update Sunday night: Avatar didn't quite storm the gates as expected, but it still did $73 million, and apparently there was a major storm on the East Coast that thwarted some moviegoing. I'm still long to delist. Morgans, OTOH, was, in fact, a bomb, and presumably will be forgotten in a few weeks. I got everything right about MRGNS, while the only thing I got clearly wrong about AVATR was the stock. It dropped H$19, but that's just 10%, and I think it will make it up. CX on HSX is still a little high, but it's impossible to tell whether or not I was right about anything of the derivatives besides the put and call. Both of which I got right. So it was a good weekend.

December 11, 2009: The Princess and the Frog, Invictus, and Lovely Bones

We're finally getting into the swing of things in the holiday season, with three good, potentially great, movies opening this weekend. Oscar season is here!

First up is a classic Disney movie, told in classic Disney hand-drawn animation.The Princess and the Frog (FROGP) is a variation on the fairy tale about a handsome prince who is turned into a frog, and needs to be kissed by a princess to turn back into a prince. One difference this time is that the princess is African-American. Disney is taking a bit of a gamble by going old-school with the animation, but I wouldn't bet against Disney and animation. The stock has been progressing nicely, and is at H$87. The strike price is nicely set at H$30, and the call (PFRCA) is, as expected, well above the IPO, currently at H$4. Put (PFRPU) is, as expected, below IPO, currently about H$1.50. Strike price for the Holiday Warrant (HWPRF) is H$100, and the price there is also above the IPO, about H$16. So far, so good. Where it gets interesting is the CX and Cantor derivatives. CX on HSX is about H$107, or 20 points higher than the stock. On Cantor, it's still a little higher, about $111. It's going out on 3,300 screens, a good wide release. It's scoring 83% on rottentomatoes.com, with lots of critics weighing in (it was released in LA and NY last week). It's already made $2.6 million. The last thing you should do is best against Disney animation. It needs to do $32 million to meet the HSX price, and $41 million to meet the Cantor price. WALL-E, which did not have a story anywhere nearly as easily sold to small children, opened with $63 million. $50 million is entirely possible for the Princess and her frog.
Stock: Long
Call: Long
Put: Short
Holiday Warrant: Long
CX on HSX: Long
Cantor: Long

Coming down to earth, we have Morgan Freeman and Matt Damon staring in a Clint Eastwood movie with a weird name, Invictus (INVIC). That's a great combination right there. Throw in Nelson Mandela and a world championship in a very tough sport, and you've got a powerful combination. There's another movie out right now that combines race and sports that has been an absolute smash - The Blind Side. I am currently realizing a 200% profit on that on Cantor. Apparently when Morgan Freeman met Nelson Mandela, Mandela told him that he wanted him, Morgan Freeman, to play him in a movie. Morgan Freeman played a black American president years ago, so playing Nelson Mandela is a natural progression. Where do you go from playing an American president? Nelson Mandela is about the only step up. I love the trailer for this movie. There's another trailer with a scene of Matt Damon rallying his troops after a defeat. Based on just that clip, I think Matt Damon is a front runner for Best Actor. The market is not quite as optimistic as I am about this. The stock is at H$43, down from a high of H$66. The strike price is H$20, which should seem unrealistic. The call (NVCCA) is dropping, and is barely above H$1. The put (NVCPU) is doing well, aiming at H$4. Strike price for the Holiday Warrant (HWINV) is H$70, and that's dropping, down to H$5. CX derivative on HSX is down to H$57, from the same high as the stock, H$66. On Cantor, it's below the CX price, down to H$52. All signs, in other words, point down. It's going out on 2,150 screens, a good release, not fantastic. But there's one very good sign: it's at 82% on RT. I think it's sinking for two reasons: 1, it's about rugby, which most Americans are not familiar with, and Obama's popularity is sinking, and many people are a little tired of inspirational rhetoric about a black president. But this also sounds like a damn good movie, Clint Eastwood has become a great director, and even if Americans don't understand rugby, they sure as heck understand winning. I'm willing to bet that lots of the women who are seeing The Blind Side don't particularly like football, but they get the story. I think that will be the case here.
Stock: Long
Call: Long
Put: Short
Holiday Warrant: Long
CX on HSX: Long
Cantor: Long

Last is a movie that is going into limited release this weekend, and going wide in January: Lovely Bones (LVBON). I have to be honest: this movie totally confounds me. It sounds incredibly depressing, but I've heard rumors of it being very highly anticipated, particularly by high school students. The stock is sinking, down to H$41, from a high of H$60. There are no options on HSX, and I'm not sure there will be. Strike price for the Holiday Warrant (HWLVB) is H$70, and that's sinking like a rock, down to H$7 or so. The CX derivative on HSX is down from H$69 to H$64. On Cantor, meanwhile, it's at $83, down from a high in the $90's. The reviews are in, and they're not good: it's at only 50% on RT, with 40 critics weighing in. Moreover, the good reviews are tepid, and many of the negative ones are strongly negative. It's only on 3 screens this weekend, and goes wide January 15th. That gives us lots of time for word of mouth to spread, and it doesn't look like it's going to spread well.
Stock: Short
Holiday Warrant: Short
CX on HSX: Short
Cantor: Short

Update Friday morning: INVIC and FROGP are both up about H$3, a good sign. It looks like INVIC might not make the strike price, but I am expecting some upside. LVBON, OTOH, keeps sinking. It's still in the high $70's on Cantor, which confuses the heck out of me. One thing I thot of yesterday writing this post is that I was highly optimistic about Peter Jackson's King Kong. I bet on Intrade that it was going to open above $100, and it opened with $66 million. We also have to remember the Wachowski brothers syndrome: they made a great movie, The Matrix, but followed it up with some real duds. So Peter Jackson is still flying on the success of the LOTR movies, but he's human. I thot King Kong was a little too ridiculous, and I haven't heard anything about it since the release. Clint Eastwood, however, has a great track record as a director. So does James Cameron, so I am very much looking forward to Avatar.

Update Sunday night: Sigh. Totally wrong on both movies.FROGP adjusted downwards, to H$77. Not a big drop, but $25 million is not the $50 million I was predicting. Can't believe I predicted something so way off from the market's prediction. INVIC continued its downward trend, only making $9 million this weekend. I think it will bounce back, but that's a long way from the $60+ that the Cantor option was trading at. Maybe it isn't a good movie to release during the holiday season. I also noticed this weekend that both of these movies star black characters (the Princess and Nelson Mandela). That would be black as opposed to African-American, because Nelson Mandela is not an American. Lesson for the week: respect the market.

December 4, 2009: Armored, Brothers, Everybody's Fine

Good collection of movies this week, one standard action adventure flick, one war movie, and a family dramedy featuring Robert De Niro.

First up is Armored (ARMRD), about an armored car heist. Always a fun topic! It's got a solid cast, including Matt Dillon and Laurence Fishburn, although the director has the unfortunate name of Nimrod Antal. The stock has been moving up quite steadily, but dropped about a week ago. It hit H$35, and is currently at H$25 on HSX. On Cantor Exchange, it has had roughly the same tragectory. The CX derivative on HSX, on the other hand, has sunk like a stone in the last few days, and hasn't come back Strike price is H$10, and the call (ARMCA) is dropping, down below the IPO price. That makes sense. The put (ARMPU), meanwhile, is marching in the opposite direction, heading towards H$3. It's only going out on 1,900 screens, so it's not a very wide release. There's only one review on rottentomatoes.com. I'm not sure if that's because it's early (I'm writing this on Wednesday night), or because the studio doesn't plan on screening it. If it's the latter, watch out. There aren't a lot of good cheesy action movies out right now, with the possible exception of Zombieland, and that's already gone. Even if it's not that good, it should pull in at least $10 million this weekend.
Stock: Long
Call: Short
Put: Short
CX on HSX: Long
Cantor: Long

'Armored' Theatrical Trailer @ Yahoo! Video

Next up is Brothers (BRTHS). This one is a little more intense. It's about a pair of brothers, one of whom goes to Afghanistan. I'm going to end the description right there. It looks rather intense. Stock has been going up steadily, currently around H$20. The strike price is about as low as possible, H$5, with the call (BRHCA) optimistically trading above H$3, and the put (BRHPU) around H$2. This is interesting: The CX derivative on HSX is at H$18, but the stock on Cantor is at $33! That's a hell of a divergence. It's rolling out on 2,000 screens. It's only scoring 50% on RT. It's got a good cast, but the story seems like a downer, particularly with President Obama's decision to send another 30,000 troops to Afghanistan. The track record of war movies about Iraq or Afghanistan is not good. I would be surprised if it does more than $7 million.
Stock: Short
Call: Short
Put: Short
CX on HSX: Long
Cantor: Short




Finally, Robert De Niro stars in a quiet family drama as a widower reconnecting with his kids. This looks like quality. It's nice to see De Niro in a sober, simple movie. He deserves something like this. The title, Everybody's Fine (EBFIN) sounds like it both is and is not ironic. It's one of those things that you say sometimes because it's true, and sometimes because you hope it's true. The stock has been marching up, but is still only at about H$16. Mr. De Niro and friends are going under the radar. Except on Cantor, where the price is $27. Strike price is H$5 - not very high expectations for this week's releases! - with the call (EBFCA) doing reasonably well, and the put (EBFPU) tanking, as expected. The CX option on HSX is almost exactly in line with the stock, a good sign. It's the widest release this week, although it's only going out on 2,200 screens. It's at 57% on RT, a solid rating, if not great. It feels like a good holiday movie for people who want something without histrionics.
Stock: Long
Call: Long
Put: Short
CX on HSX: Long
Cantor: Long

'Everybodys Fine' Theatrical Trailer @ Yahoo! Video

Update Monday morning: Well, I was wrong about all of the stocks, but not by much. Armored and Everybody's Fine turned out to be duds, while Brothers did slightly better than I expected. Apparently the weekend after Thanksgiving is a traditionally slow one, so studios tend to release weak movies this weekend. That's another thing I learned. It makes sense, tho, since the big Thanksgiving weekend movies are still popular, and taking up a lot of screens. Overall, I got 5 out of 15 calls right. But next weekend, things should be heating up quite a bit.