Thursday, April 1, 2010

April 2, 2010: Why Did I Clash With The Titans?

It's April Fools Day today, but I'm not going to spring any surprises on anyone. Looks like Miley Cyrus is doing well at the box office; The Last Song snagged $5 million at the box office on Wednesday, so the opening weekend should be solid. Also opening this weekend is Tyler Perry, back wondering why he got married, and a remake of The Clash of the Titans. The Original Idea Fund will not be investing in any of these movies.

Tyler Perry is a one-man moviemaking machine these days, cranking them out faster than Woody Allen. He's got a niche, he's milking it, and he's doing a great job. Why Did I Get Married Too (WDIG2) fits his formula and his plans for world domination. The stock has been climbing quite steadily, and is currently at H$54, or a $20 million opening weekend. The original made about $55 million, so we are looking for this one to outgross the first. Given Perry's record of success at establishing himself as a reliable brand, that's entirely possible. The strike price was set somewhat optimistically at H$25, which would imply a stock price of H$67. Not impossible, but not likely. The call (WDI2CA), not at all surprisingly, is down to a buck and change. The put (WDI2PU), equally unsurprisingly, is soaring, above H$3. It's going out on 2,100 screens, a good release, but not great. There is only one review on, which suggests that it was not screened for critics, which is somewhat disconcerting. The CX derivative is almost exactly the same price as the stock, which is a tad unusual. The one review on RT, from Armond White of the New York Press, makes the very good point that this formula is starting to feel stale. I wouldn't know, not being all that familiar with Mr. Perry's work. My guess is that there is still some gas in the tank, but I will be watching this one closely tomorrow morning.
Stock: Long
Call: Short
Put: Short
CX: Long

At the other end of the demographic scale, although not that far away on the art-vs.-entertainment scale, is Clash of the Titans, a remake of the 1981 movie. I haven't seen the original, and it's not "on the list," i.e. the list of movies that I think I should see, but haven't. My impression is that it's famous more for the special effects than the plot, of which I know very little. The stock has been climbing quite steadily, just like Mr. Perry's movie, and currently is floating just under H$190. That's a $70 million opening weekend, somewhat below the strike price of H$75. The buzz is quite substantial, as evidenced by the call (CLASCA), which is about H$5. That would mean an $80 million weekend, or an adjust to $216, or up by H$26. The put (CLASPU), meanwhile, is up today, while the call is down. I am sensing a slight realignment, with the call dropping and the put moving up. The CX derivative is down almost H$3 today, just about level with the stock. It's going out on 3,700 screens, a good wide release, as is expected. Many of those screens will be showing it in 3D, although it's not clear how many, since there has been much discussion of late about the shortage of 3D screens, with more demand for 3D screens that supply at this point. It wasn't shot in 3D, a minor problem, but one that didn't slow down the Alice in Wonderland juggernaut. I'm not really clear on what the plot is, other than it being a clash of titans. The trailer does not give away much of the plot, but is nicely edited and fast paced. I'm sure it will be quite entertaining, but not enlightening in any way. Critics are fairly savage, with only a 35% approval rating on RT. Normally that wouldn't matter much with a movie like this, but my gut tells me that a fair number of people are bored with too much CGI, which is what this feels like. One of the most important critics, Harry Knowles of Ain't It Cool News, rips it apart. I don't always agree with him, but the man knows his movies, and he just shreds this screenplay. If you've lost the head geek, you're in trouble.
Stock: Short
Call: Short
Put: Long
CX: Short

Update Friday morning: WDIG2 is up almost H$4, so that is looking good. I am maintaining all positions there, although I am least certain about the call - this may very well bring in more than $25 million this weekend. CLASH, on the other hand, is not looking any better than it did yesterday. Earlier this morning it was down almost H$14. I don't think I have ever seen a drop that dramatic on an opening day. It's still down almost H$7. Definitely maintaining the short there.
Update Sunday afternoon: Well, it was a great weekened here at TEQP-HSX. I nailed just about every prediction. CLASH did come in at the l0w end of expectations, and way below the strike price, at $61 million (with $2.5 million previously, presumably Thursday night). It dropped from H$186 to H$168. Tyler Perry, once again, confounded critics and delivered the goods. The one mistake that I made was the one prediction I was most uncomfortable with, which was the call on WDIG2. It opened at $30 million, nicely above the strike price, and adjusted up from H$59 to H$81. Nicely done, Mr. Perry. I've learned this lesson once, and apparently I will have to learn it again: don't underestimate Tyler Perry. Miley Cyrus did marginally better than expected, clearing $16 million from Friday to Sunday, and $9 million on Wednesday and Thursday. LSONG adjusted up to H$53, from H$48. I am staying short on CLASH to delist, and long on the other two, assuming that word of mouth is decent.

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