First up is Green Zone (GREZN), Matt Damon starring in a movie about searching for weapons of mass destruction in Iraq. It's directed by Paul Greengrass, who did the second and third Bourne movies. That's a successful pairing, Damon and this director; those movies opened with $52 and $69 million, respectively. Expectations are lower for this one, with the stock in the low 60's. Strike price is H$25, a reasonable bet. The call (GREZCA) is above H$3, a good sign. That would put the stock at H$75. The put (GREZPU), however, is also above H$3, and has had a steadier march up. The CX derivative on HSX is at H$60, dropping substantially of late. Reviews are decidedly mixed, at 50% on rottentomatoes.com. My gut tells me that the floor for this movie is $20 million, and that there is more potential on the upside to be surprised than on the downside. Definitely one to watch tomorrow morning.
Stock: Long
Call: Long
Put: Short
CX on HSX: Long
Cantor: Long
Filling in the "disposable raunchy teen comedy" slot is "She's Out of My League," (SHOML), about an average-looking guy who scores with a seriously hot girl. It's a good premise for this kind of movie. Stock is in the high H$30's, just off the high. Strike price is H$15, with the call (SHOMCA) at H$3. That's a stock price of H$48. Put (SHOMPU) is at H$2.52, so mixed signals there. Just watched the redband trailer, which is funny. Signals are looking good. It's at 41% on rottentomatoes.com, which is not surprising, and probably not all that relevant. I have a feeling the target audience will like this. No votes on IMDb, kind of a bummer.
Stock: Long
Call: Long
Put: Short
CX on HSX: Long
Cantor: Long
Robert Pattinson, who broke big with the Twilight series, shows up in another movie, "Remember Me," (REMBR) a movie with an utterly forgettable title. The plot also sounds fairly forgettable, like a coming of age story with some good casting. Besides Pattinson, Chris Cooper and Pierce Brosnan play distant fathers, and Emile de Ravin is the love interest. I have zero interest in this. Sounds like an arthouse movie that got lucky. The stock is at H$34, down from a high of H$39. The call (REMBCA) is below the IPO price, not surprising, and not a good sign. The put (REMBPU), meanwhile, is above H$3. So far, every signal is pointing to a flop. The CX derivative on HSX is also down, to about H$35. That's another one. On Cantor it is, inexplicably, at $43. Reviews are not good, at 38% on RT. My impression is that it might attract a good female crowd, but men are going to stay away in droves. The average rating on IMDb is 5.4. Wow, that's not good.
Stock: Short
Call: Short
Put: Long
CX on HSX: Short
Cantor: Short
Last, and probably least, is "Our Family Wedding," (FAMWD) about a wedding between an interracial couple. The twist is that he's black, but she's not white, she's Hispanic (although Hispanics can be of any race). It's a very standard premise, and sounds highly predictable. The cast is decent, but no superstars. Stock is H$23, and it's nosediving. Movies with black or Hispanic casts are occasionally underestimated on HSX, and that might be the case here, but I don't think it's going to beat the market by much, if anything. Strike price is H$10, which suddenly looks optimistic. Call (FAMWCA) is barely above a buck, which is a terrible sign. The put (FAMWPU) is, as can be expected, doing well, coming close to H$3. CX derivative on HSX is at H$29, also nosediving. It's at 4% on RT, which is about the strongest signal possible for "bomb." Sounds like it could be offensive to people of all races.
Stock: Short
Call: Short
Put: Long
CX on HSX: Short
Cantor: Short
Update Sunday night: Not a bad weekend for me. I missed Green Zone and She's Out of My League, but nailed Remember Me and Our Family Wedding. I noticed that Green Zone was dropping on Friday night, so I sold my the shares on Cantor that I had bought in the low 70's (whew!). I bought 3 shares at $62, as a hedge. So I lost a tad bit there, but not much. Now I regret not shorting it at $91! Turns out that the Iraq war problem affects major stars, as well. My problem with the marketing is that I couldn't tell quite what the movie was about. Is he looking for weapons of mass destruction? We know there weren't any. So I wasn't quite sure what this movie was about. I overestimated the audience for SHOML. A movie like that really has to rock to break out of its niche. I also forgot that the other studios will probably be dumping bad movies the weekend after a major blockbuster like ALCNW. More lessons learned.
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