Thursday, April 29, 2010

April 30, 2010: Furry Vengeance, A Nightmare on Elm Street

The summer season is not quite here, but almost! Next week the blockbusters start, with Iron Man 2 heralding the arrival of the usual bumper crop of explosions, hot bodies, and CGI. Should be fun!

Meanwhile, tho, we've got a couple of movies being dumped into the netherworld of pre-blockbuster movie season. The competition will heat up very quickly, so studios are releasing movies that they don't expect will do very well, anyway.

I finally started up my spreadsheet to judge movies. Neither of these scored very well. Both are going out on lots of screens.

First up, and probably the first to disappear, is Furry Vengeance (FURYV), starring Brendan Fraser, master of the midrange movie. It also stars - if "stars" is the right word - Brooke Shields, who must need a paycheck. Her name is nowhere in the marketing, which is probably a plus for her. Fraser is a real estate developer who wants to clear a forest to make way for a shopping mall or something. The local animals have different ideas. It's almost a clever premise. Well, not really. The stock has been dropping like a rock, and is just below H$25, from a high of H$46. This is what we call a "meltdown." Strike price is H$10, a usually lowball price, but it seems almost quaint with the price of the stock where it is. The call (FURYCA) is just above 50 cents, confirmation of aforementioned meltdown. Put (FURYPU) is at H$3 and change, suggesting an opening weekend barely above $6 million. Which should just about pay for Brendan Fraser's drycleaning. The CX derivative is at H$30, presumably because it just hasn't dropped far enough yet. It has a 3.2 rating on IMDb. Critics are doing their worst, with a 0% (yes, that's a zero) rating on There are only 13 reviews on Thursday afternoon, which implies that it was not screened for critics. Which absolutely would not be a surprise.
Stock: Short
Call: Short
Put: Long
CX: Short

On the other side of the aesthetic scale from family movies about cute animals is A Nightmare On Elm Street (NELMS), a place where it is dangerous to fall asleep. Not being a connoisseur of the genre, I'm not sure how well this is going to play. It's iconic enough of a franchise that even I know the name Freddy Kreuger, but I'm not sure if this reboot will work as well as others have. The stock is at H$93, down from the high of H$96, but just barely. But the director is fairly new, at least to movies - he's made a lot of music videos. So we can expect it to look good, but we're not sure about the plot. The writers are also a little thin in the movie credits department, so my guess is that the studio didn't put a lot of money into the script, and they hired a journeyman to make it. Neither is all that inspiring, although not all that crucial. CX derivative is H$93, almost exactly the stock price, but down dramatically from the absurd high of H$115. Strike price is H$35, right on target. Call (NELMCA) is riding nice and high at H$4, almost H$5. That gives us a $40 million opening weekend, and an adjust of H$108. However, the put (NELMPU) is not doing badly either, just under H$3. So slightly mixed signals there. No mixed signals from the critics, who basically hate it - all of a 6% rating on RT. Harry Knowles, on the other hand, loves it, so there's hope from geekdom. The key producer is Michael Bay, and his production company made the very successful Texas Chain Saw Massacre and Friday the 13th remakes. We're going to go with that record.
Stock: Long
Call: Long
Put: Short
CX: Long

Update Friday morning: FURYV is down to under H$22 - I don't think it can go much lower, but you never know, so I'm staying with that short. Freddy and friends are up H$4.50 this morning, so that long looks good, too. There must be a lot of people out there desperate for some good horror. Maintaining all positions.

Update Sunday night: Another split weekend. Brendan Fraser's career continues to crater, as FURYV only pulled in $6.5 million, while Freddy was successfully resurrected from the dead, or wherever he was, as NELMS pulled in $32 million. Way to go, Freddy, although that wasn't quite as good as I was hoping. I was optimistic about Nightmare's prospects when it opened with $15 million on Friday, but I forgot how skewed the results are for horror movies - Friday accounted for 49% of the weekend's take. And, of course, it will drop quickly from here on out. Shorting to delist is a sure thing this time around.

My mistake this weekend was not using a checklist as well as the spreadsheet. One item I will have on my checklist when I make it is this question: Is there greater potential on the upside, or the downside? The answer for Freddy et al. would have clearly been that there was more potential on the downside, as it was trading near the high for this kind of movie, and there wasn't a lot going for it, besides the franchise. It's a good franchise, and we have seen other horror franchises rebooted of late, but we've also seen horror franchises sputter. And I forgot about the tendency for horror movies to drop so fast. OTOH, I am happy with my FURYV prediction, because that was trading way down low, and I wasn't sure how much potential there was on the downside. So I'm happy I recognized a complete bomb in the making.

1 comment:

  1. How much weight do you assign to the 'gutchecks' offered on HSX ? Successful traders cough up their own thoughts prior to close of trading ---do these folks influence your current or future decisions ?