June 18, 2010: Toy Story 3, Jonah Hex, Cyrus

We're settling in to summer, with a genuine blockbuster, a wannabe blockbuster that looks like it will be anything but, and a sort-of arthouse funky comedy.

First up, the blockbuster, Toy Story 3 (TOYS3). This is the franchise that started other trends - great movies from Pixar, computer animation, animated movies that look like they're for kids, but are really for adults. The anticipation is reflected in the stock price; it's $288, or about a $106 million opening. It's gone mostly up, quite steadily, although not quickly. There was buzz on this one for a long time. This isn't a holiday weekend, so there's no funky adjusting. It's not opening on a Thursday, although I am sure there will be midnight screenings tonight. The strike price is H$110, which is just about right, although just slightly higher than the stock price would indicate. The call (TOY3CA) is doing quite well, thank you very much, at H$5 and a half. The put, however, is also doing rather well, aiming at H$4. The CX derivative is at H$324, although it went through a very different trajectory, hitting H$358 before coming back down. Strike price for the blockbuster warrant (BWTOY3) is H$350. That's at $8 and change, so it's not busting out. The feeling I get is there is a lot of enthusiasm, and potential excitement, but also some caution. We've seen some bubbles burst of late. But we've also seen some surprises, notably last weekend, with The Karate Kid blowing away expectations. One of the cautionary tales was Shrek 4, although that should not have been that surprising, since the franchise was clearly wearing out its welcome, and the third movie was not that well received. Pixar hasn't really had a bad movie, or even a movie that was less than very well-received. This already has a 9.4 rating on IMDb, which is great. It has a virtually unheard-of 100% ratings on rottentomatoes.com. Unheard of, of course, except for the first two, which also have 100% ratings. So the two big questions of late: am I in a bubble? and Is there more potential on the upside or downside? would seem to be answered thusly: I seriously doubt I am in a bubble. The reputation of Pixar and these particular movies is very well-known. Extremely well-known. There isn't much downside. Shrek made $70 million, with mediocre reviews. About the only potential downside is that many members of the audience have severe sequelitis, but this is still a franchise with a reputation for originality. It's opening on 4,000+ screens. The studio is going wide, I'm going long.

Stock: Long

Call: Long

Put: Short

CX: Long

Blockbuster Warrant: Long

Next up is Jonah Hex (JOHEX). There are lots of reasons for uncertainty with this movie. It's based on a comic book that I have never heard of. I'm not clear on what, if any, superpowers the title character has. He is intentionally unattractive. The actor playing him is well-known and respected (Josh Brolin), but not in the opening-a-blockbuster-by-himself league. The hot actress (Megan Fox) may have already outlived her 15 minutes. The director, Jimmy Hayward, doesn't have much relevant experience, but he does have some good movies on his resume, ironically at Pixar. I find it strange that he was chosen to direct this, but I could be missing something. The stock is tanking, down to H$36 from H$103. That's really not good. The strike price is H$20, which, tragically, absurd by now. Call (JOHECA) is below H$1, while the put (JOHEPU) is above H$5. There are only 9 reviews on RT, but with that, it's at only 11%. CX derivative is at H$51, and I think it's that high only because it hasn't had enough time to drop. The strike price for the BW is H$80, which is just sad. It's at 19 cents, down 13 cents today. Almost makes you feel sorry for whoever still has it long. I can't find a single reason to be optimistic about this movie.

Stock: Short

Call: Short

Put: Long

CX: Short

BW: Short

Finally, we have the most intriguing movie of the weekend, at least from a box-office-potential perspective. Cyrus (CYRUS) is sort of a romantic comedy about a single woman, whose son interferes with her dating life. Sounds interesting. The trailer isn't the greatest - John C. Reilly plays a guy who seems a little socially awkward, but who ends up with Marisa Tomei. Jonah Hill plays her son, who proceeds to make life even more awkward. Could be brilliant, could be one of those movies that polarizes audiences. Stock is H$12, down from a high of H$22. Looks like the buzz has worn off a bit. There are no derivatives. It's doing quite well on RT, with an 82% rating. It's only opening on 4 screens this weekend, so it's obviously not adjusting. I'm going to call it anyways.

Stock: Short

Update Friday morning: Both stocks opening wide are moving in the direction I predicted: TOYS3 is up, while JOHEX is down, to H$30. If it wasn't so completely devoid of interesting qualities, I would suspect that would be a buy. But it's still an $11 million opening weekend, and there is some room between that number and zero. Maintaining all positions.

Update Sunday night: Mostly a positive weekend. Toy Story 3 came in at $109 million, almost exactly at the strike price. The stock technically adjusted down, but only H$5. Considering that it was at almost H$300, that's not a great variation. It's an obvious hold long to delist, Also technically, I was wrong on the options, although since it is so close to the strike price, I am going to wait for the final numbers tomorrow. I was right about the CX derivative, which adjusted down quite a bit. The BW is maintaining about the same price, so that's tough to call at this point.

I did nail JOHEX, which is apparently a God-awful piece of garbage. Hard to believe a movie with a strike price of H$20 came in at $5 million. I shorted it at H$79. It's currently at H$13, and I would bet it will delist around H$10. Made a fortune on that one.

Cyrus had a great weekend at its four theaters, so I am reversing position and going long on that one.

Update Monday night: Wow, that was close. Looks like it was a good call for me to wait until today to determine whether or not I was right about the TOYS3 calls. I was, in fact, right about both: it officially cleared $110.3 million, just barely above the strike price, right on the sweet spot. Ideally, it would have been perfect if I had shorted the call, but it cashed out on the plus side, so I'm all good.

March 21, 2010: Shrek and MacGruber

There are two movies opening this weekend, both comedies. One is pretty much a guaranteed blockbuster, the other is a product of Saturday Night Live.

Shrek 4evah (SHRK4) is finally here, and our beloved green ogre is finally bidding his adieus. It's been fun, green man! I like the way DreamWorks is handling this - they seem to be bowing out gracefully. They've had a great run, now it's time to say goodbye. The stock is trading at H$247, down from a high of H$265, but up H$4 and change today. Strike price is H$90, right on target, with the call (SHR4CA) trading nice and high around H$5. The put (SHR4PU) isn't doing too badly, either, however, aiming at H$3. The stock price indicates an opening of H$91, so the split on the options is understandable. The CX derivative hit a high of H$331, and has been dropping ever since, currently around H$280. It's going out on a bazillion or so screens. It's in 3D, which I almost forgot about, because it's just not that exciting. But that may help the BO. Critics are not that impressed, with only about half reasonably impressed, giving it a 50% rating on RT. I remember not being that impressed with the third one, so that may diminish the appeal of this one. Shrek 2 opened with $108 million, and Shrek 3 opened with $121 million. However, Shrek 3 did not make as much as Shrek 2, $322 million domestically versus $441 million. So we're on a downward trend, but that is taken into account with the stock. The director raises some concerns for me: Mike Mitchell's big movie on his resume is Deuce Bigolo: Male Gigolo. The writers haven't done all that much, either. That suggests that DreamWorks wasn't willing to spend the money for the best people. That's not good. I have no interest in seeing this, but I think there's some lingering goodwill. I think it will beat the lowered expectations. But I will be watching it closely.

Stock: Long

Call: Long

Put: Short

CX: Short

The other opening this week is MacGruber (MGRUB), a spinoff of the Saturday Night Live sketch. Stock is not doing well, currently at H$38, down from a high of H$49. The strike price is H$15. So we have one of those situations where HSX made a good guess about the strike price a couple of weeks ago, but it's now ridiculous. Call (MGRUCA) is below H$2, while the put (MGRUPU) is above H$3. CX derivative is at H$38, down from H$47 -so it has been moving in line with the stock. It's going out on 2,400 screens, not a bad release, but not ultrawide. Critics are excited, with an 89% rating on RT, but that's only 9 critics. I think the trailer is terrible, and I have no interest whatsoever in seeing this movie, which looks like it will bomb.

Stock: Short

Call: Short

Put: Long

CX: Short

Update Friday morning: The Big Green Guy is still doing well, up H$1.50 today. MacGruber is still tanking, down H$2.25 to H$33. One of the questions that I am starting to ask is: If a movie is targeted at a specific audience, what are the chances that it will expand outside of that demographic? For example, last week, Letters to Juliet was targeted at women, with very little chance of attracting men, other than guys on dates. This week, SHRK4 is targeted at kids and families, but the appeal of the franchise is extremely broad. MacGruber, OTOH, is targeted at - well, I'm not sure, exactly, but it's probably teenage boys - and doesn't have much chance of expanding out of that. Maintaining all positions.

Update Sunday night: An almost perfectly split weekend, at least as far as my predictions. A rather terrible weekend, as far as actual results. I nailed MacGruber, which did in fact bomb - it made a grand total of $4 million. I never understood the appeal of this movie, and am very glad I made a good chunk of change shorting it. I needed that shot in the arm, cash-wise, because I was mostly wrong about Shrek 4. It opened with $71 million, not a bad haul, but way below expectations. I made a couple of mistakes: one, I didn't ask myself whether or not I wanted to see it, which is relevant for such a wide, mainstream release. The answer is no, I have no interest, I'm kind of bored with Shrek. Two, I put too much emphasis on the movement in the last two days. Three, I didn't go with the downward trend. Four, I was way too inside the bubble of Hollywood and the industry, and I didn't realize that. That's another question to ask: am I in the bubble? Shrek was getting a huge amount of publicity, but that's all a function of the bubble - lots of media groups want to do interviews etc. with the cast, because that's cheap and interesting for a couple of days. But it's also manufactured by the studio. Way too inside the bubble. That's the lesson for the weak.

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 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.

November 20, 2009: Blind Side, Planet 51, New Moon

There are three movies opening this weekend, one rather large one, and two others, whose studio executives are brave enough to release movies against one of the most anticipated movies of the year.

Let's get the small fry out of the way. First up is Planet 51 (PLT51), an animated movie about an astronaut who ends up on another planet, where the aliens look and act a lot like earthlings. I like the trailer, I think it's a funny concept, particularly for a kid's movie. Not many people seem to agree with me - the stock has been tanking, dropping from H$57 just a month ago to H$38 today. Much of that, I am sure, is because traders are assuming that Twilight 2 will overwhelm everything in its path. I'm not so sure - that's going to be a big hit, but primarily with young women. The strike price is H$20, which seems very high today, although it made sense a month ago. Call is (P51CA) not doing too badly, considering, just below H$2. The put (P51PU), as expected, is doing well, aiming at H$4. The CX derivative on HSX, interestingly, has followed the same trajectory, but hit a higher high (H$64), and is still in the mid H$50's. On cantorexchange.com, the same security is down to $45. It's opening on 2,600+ screens, which is a good wide release. There aren't enough reviews to get a good feel at rottentomatoes.com. So it doesn't look good - most of the signs are negative, except for the fact that the trailer is entertaining. Still, at this price, it also looks like a good deal. The second weekend for this movie will be Thanksgiving weekend, so assuming the word of mouth is even remotely decent, it should delist well above the adjust.

Stock: Long

Call: Short

Put: Long

CX on HSX: Short

Cantor: Long

'Planet 51' Theatrical Trailer @ Yahoo! Video

Bringing us rather powerfully down to earth is The Blind Side (BLDSD), Sandra Bullock starring in a true story about a Southern woman who takes in a young African American man. It's supposed to be for one night, but ends up being forever. That young man is now an NFL left tackle (hence the title - the left tackle defends a quarterback's blind side). The trailer is inspirational as all get-out. It's a great role for Sandra Bullock, a solid contrast to her other two roles this year. It's a powerful combination: a Southern woman, football, and a big, potentially threatening, African American young man. There's going to be a whole lot of redemption up there on the screen. This is going to play very, very well in the South. Which means that it may very well be underestimated on the coasts. The stock has been mostly moving up, and is around H$41. Strike price is appropriately set at H$15. Call (BSDCA) is below IPO, at H$1.61 as of this writing. Hmmm. But a $15 million opening weekend would translate to an adjust of H$40.5. So the call is predicting that the stock will not adjust much, if at all. The put (BSDPU) is moving up smartly, heading towards H$3. The CX option on HSX (BLDSD.CX) has been floating in the mid-H$40's, but trending down. On cantorexchange, however, it's up $3 today to $43. It's doing exceptionally well on RT so far, with 73% positive. It's also on 3,100+ screens. There is one strong positive: Tim McGraw is in it. You don't get more Southern star power than Tim McGraw, with the possible exception of his wife. His presence will give it all kinds of credibility where it counts.

Stock: Long

Call: Long

Put: Short

CX on HSX: Long

Cantor: Long

Then there's this little movie called The Twilight Saga: New Moon (TWLI2) about some cute undead guys. I can almost hear the shrieking teenage girls from here. I haven't read the books and have no intention of doing so. I didn't see the first movie and have no intention of doing so. So I'm not the best judge of where this is going, but I do sense a little bit of a backlash. Maybe that's because I am so uninterested in it myself. The stock has been climbing, of course, and is at H$260, or about a $96 million opening weekend. The strike price is H$90, and the call (TW2CA) is soaring, almost at H$9. Lots of people are very optimistic about this one. The put (TW2PU) reflects the same sentiment, dropping below IPO. There's a Holiday Warrant (HWTW2), with a strike price of H$220. That's in the clouds, too, at H$20. The CX option is, of course, higher than the stock, at H$273. It's only at 53% on RT at this point, but who cares? It's going out on a bazillion - sorry, only 4,000+ - screens. The price on cantorexchange.com, however, is below the price on HSX; it's at $245. That's unusual. I'm going to watch this carefully, but I am thinking that $90 million is optimistic for this opening weekend. The fans of the series are fanatical, but this is limited to one segment of the population. I just don't see a lot of guys going to this movie. An $80 million opening weekend would still make it a smashing success.

Stock: Short

Call: Short

Put: Long

Holiday Warrant: Long

CX on HSX: Short

Cantor: Short

'New Moon' Theatrical Trailer @ Yahoo! Video

Wow, I don't think I have ever been so wrong on an HSX prediction. New Moon didn't just open above $90 million - it grossed almost that much on its opening day. It cleared $140 million. Never underestimate the power of teenage girls! I got everything except the holiday warrant wrong. Fortunately, I caught my mistake early, and reversed position on Cantor. I wasn't soon enough to reverse my position on HSX, but at least I made money somewhere. I did get everything right about The Blind Side, so the weekend wasn't a total wash. That did extremely well, clearing $34 million, and adjusting up by H$53. Nicely done, Ms. Bullock. Planet 51 didn't do all that well, only pulling in $12 million, and adjusting down by H$4. I was wrong on the stock, but right about the call and put. It's too early to tell if I got the CX derivative or the Cantor stock right. It is possible to make a judgment about the other two movies and their CX/Cantor securities - I was right about Blind Side, wrong about TWLI2. So I got 8 right and 6 wrong, but I got the big one wrong. I will never live this one down. But I learned from it!

October 23, 2009: Astro Boy, Amelia, Saw 6, and Cirque du Freak

A nice broad range of movies this weekend, although nothing I am all that excited about for myself.

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

'Astro Boy' Trailer

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

'Amelia' Theatrical Trailer @ Yahoo! Video

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.

Cloudy With A Chance Of Jennifer's Body Being An Informant or Love Happening

We have an interesting assortment of movies this weekend. No more summer blockbusters, but all solid possibilities for entertainment. There might even be an Oscar nomination in here somewhere.

First up is Cloudy With A Chance Of Meatballs (CWCMB), one of the best titles for a movie ever, based on a children's book of the same great name. It's animated, naturally in 3-D, as so many animated movies seem to be these days, and basically destined to attract lots and lots and lots of kids. Pancakes falling from the sky? How cool is that? Way cool, if you're 7. Still fun, even if you're 70. The stock is at H$72 today, up about H$2. That's down from a high of H$84, but many stocks are down from the highs they hit in August, so that's not surprising. The strike price is rather optimistically priced at H$30. That made sense when the stock was above H$80, not so much today. H$73 predicts an opening weekend of about $27. The call (CWCCA), not surprisingly, is not doing all that well, right at the IPO price. The put (CWCPU) is, on the other hand, doing quite well, aiming at H$4. It's opening on 3,119 screens. Critics are loving it, with an 88% fresh rating on rottentomatoes.com. I think we should be prepared for a nice surprise on the up side. "Up" made $68 million on its opening weekend. It had the Pixar brand going for it, but not quite as obvious a marketing hook. This looks like a seriously fun movie. I'm going with $30 million or more.

Stock: Long

Call: Long

Put: Short

Cloudy with a Chance of Meatballs in HD


Staying in the comedy genre, but this time with real actors playing real people, we have The Informant! (INFOR), complete with exclamation point. It's the true story of a guy named Mark Whitacre, who wanted to blow the whistle on his employer, Archer Daniels Midland, and how they were messing with various markets for various things made from corn. We know what happened (although I'm not going to tell you), so there isn't a lot of suspense in the plot. But how does a story about accounting gone bad turn into a comedy? There aren't a lot of directors out there who could pull this off, but if anyone can, it's Steven Soderbergh. Matt Damon looks perfectly cast. The stock is at $32, down H$2 today, and way, way down from a high of H$47. Another victim of hype and post-August retrenchment. I've been waiting for this movie, and might see it this weekend. H$32 suggests about a $12 million opening weekend. The strike price is above that, at H$15, but the call (INFCA) is holding up, above the IPO. The put (INFPU), however, is doing better, above H$3. It's opening on 2,505 screens, scoring well on rottentomatoes.com (67%), and has some good marketing hooks, including a famous director and well-respected actor. But still, it's not the easiest movie to sell. I'm looking for the sweet spot between the options, somewhere around $12-14 million.

Stock: Long

Call: Short

Put: Short

'Informant' Theatrical Trailer @ Yahoo! Video

As usual, I don't know how to review this next one, because it's a horror movie, and I don't do horror movies. But Jennifer's Body (JBODY) stars Megan Fox, Hollywood's latest hottie, who is actually quite hot. Following the pattern of the week, this one has dropped precipitously in the last couple of weeks. It's currently around H$40, down from a high of H$57, but up slightly today. Ms. Fox plays a girl in high school who has been possessed by a demon, and is now a real man-eater - literally. It's gotten oh-so-much buzz, being the product of screenwriter Diablo Cody's imagination (Juno), but it's also on the receiving end of a backlash or two; it's only at 34% on rottentomatoes.com. The reviewer from horror.com, however, loved it, which has to be a good sign. It's on 2,701 screens, not the widest possible release, but solid. The call (JBOCA) has been on a roller coaster, as much as it could be one on in a week, way up, down, and now recovering to just over H$2. The put (JBOPU) has also had ups and downs, although it is strongly in the positive, roughly H$3 and a half. The plot sounds somewhat different, at least, which is sometimes enough to keep the buzz alive. Quite the alternative take on female empowerment! Besides, most of the reviewers are adults, and this is aimed very squarely at the pre-drinking age set. I'm thinking $15-17 million.

Stock: Long

Call: Long

Put: Short

Finally, we have a romantic comedy that looks like it has some heavy elements of a romantic drama, Love Happens (LVHAP). I don't think I really know which it is, comedy or drama, and I'm really not that interested in finding out. I loved Aaron Eckhart in "Thank You For Smoking," and I think Jennifer Aniston is attractive, but I can't say that I have ever found any of her performances inspiring. That may be because I haven't seen that many of her performances, because I haven't noticed a movie of hers that really grabbed my attention. Neither does this one. I can feel the sentimentality just oozing through the screen as I watch the trailer. Once again, the stock is down from its recent high, from H$33 to H$25, down H$2. Low expectations are being lowered. Partially by the studio: it's only going out on 1,800 screens, so Universal is looking to contain their losses. Critics are not enthusiastic, with only 23% of those posting on rottentomatoes.com finding the bright side of death and love. Strike price is very reasonably set at H$10, but it doesn't look like it will make it that high. The call (LVHCA) is below a buck, while the put (LVHPU) is floating above the IPO, at H$2 and change. There's not a lot of room below $10 million for a major studio release featuring an allegedly A-list movie star, so let's guess $7-9 million. Going for the sweet spot again.

Stock: Long

Call: Short

Put: Short

'Love Happens' Theatrical Trailer @ Yahoo! Video

In the interests of diversity and promoting independent and foreign film, and because I am intrigued by both of these movies, here are the trailers for two other movies opening this weekend, although in limited release. I don't predict opening weekend box office results for movies opening in limited release, because they don't adjust on HSX, but I like these two trailers. Bright Star is a period piece but about an intensely romantic life and story: John Keats, Romantic poet, and Fanny Brawne, the love of his very short life (he died at 25).

'Bright Star' Theatrical Trailer @ Yahoo! Video

Dil Bole Hadippa, OTOH, is a Bollywood comedy about a woman who pretends to be a man to be able to play cricket. I had no idea cricket was so colorful or sexy.

Update Sunday night: Looks like I misread the market a bit; I thot that the slumps in stock prices among this week's openers was part of a general post-summer trend, but some of that drop-off was real, although there was only one real bomb this weekend, Jennifer's Body. Watch out for that backlash, Megan! CWCMB was the exception, opening at $30.1 million and adjusting up slightly. I got that one almost exactly right, although I was wrong about the call. Holding that long to delist. The market nailed the predictions for INFOR and LVHAP; both adjusted up less than a buck. We traders must be getting good at this or something. INFOR brought in $10 million, below my prediction. Got the call right, the put wrong on Mr. Soderbergh's latest. Again, long to delist. I got everything right about LVHAP; it brought in $8.4 million, almost exactly in the middle of my prediction, and I got both of the options right. Short to delist, because I don't think it's going to generate much buzz. Jennifer's Body, the aforementioned bomb, adjusted way down, bringing in a grand total of $6.8 million, and adjusting to H$18, down from H$37. I was completely wrong, and badly so.

Out of 12 predictions, 3 for each of 4 movies, I got 7 right and 5 wrong, but I missed the most important call of the weekend, for JBODY. Gotta remember NOT to trust my instincts when it comes to horror movies.

9, I Can Do Bad All By Myself, Sorority Row, Whiteout

A mix of average and a little weirdness this week. Yesterday was 9/9/09, the perfect day to release a movie called "9." I forgot it was opening on Wednesday, sorry. So no predictions, although it looks interesting. Anyway, here's the trailer:

'Nine' Theatrical Trailer @ Yahoo! Video

One trend of this week is that all the movies are off from their highs. I'm not sure if we are in a post-Labor Day Haze, or if we are in that lull between summer blockbusters and awards season movies.

One slight exception is Tyler Perry's "I Can Do Bad All By Myself" (ICDBA), which is at H$70, fairly close to its high of H$75. I'm not sure what it's about, but the trailer, short and simple as it is, is very funny. I try not to be against Tyler Perry. HSX has set the strike price at H$30, a shade on the high side, but not reasonable. The call (ICDCA) is doing well, almost at H$3, but the put (ICDPU) is almost exactly the same price. H$70 suggests an opening weekend around $25 million, so the call looks overpriced. But it's otherwise a slow weekend, so Perry's timing might be impeccable. His last movie, "Madea Goes To Jail," opened with $41 million. Like I said, I don't like betting against Tyler Perry.

Stock: Long

Call: Long

Put: Short

'I Can Do Bad All By Myself' Teaser Trailer @ Yahoo! Video

There's yet another horror movie featuring hot young people being killed off; this time they're sorority sisters, hence "Sorority Row" (HSROW). As usual, I have no idea how to judge the appeal of these movies, so I am just going to go long, because H$27 feels cheap to me. Strike price is perfectly positioned at H$10. The call (SRWCA) isn't doing well, down slightly from the IPO, but the put (SRWPU) isn't all that great, either, at only H$1.35. The reviews are decent so far; it's at 63% on rottentomatoes.com, but that's only with 9 reviews. I'm going for the sweet spot between the two, right about $10 million. Someone isn't looking forward to this movie.

Stock: Long

Call: Short

Put: Short

'Sorority Row' Theatrical Trailer @ Yahoo! Video

Last and, unfortunately, quite possibly least, is "Whiteout," (WTOUT) a thriller/action something or other that takes in Antarctica. That's an interesting place to set a movie. Geography automatically lends a certain amount of drama, but also presents some problems, not least of which is a lack of visually interesting landscape, as suggested by the title. Also, it means that all of the characters are going to spend large chunks of screen time bundled up, i.e. hiding their figures, although apparently Kate Beckinsale, the star, takes a shower. Eye candy and all that. The stock is heading south, along with the plot (sorry, couldn't resist), down to H$25, from a high of H$43. Expectations are being lowered right along with the temperature. Strike price is H$10, again nice call by DMac. The call (WHOCA) is following the stock, below the IPO, with the put going in the opposite direction, coming close to H$3. I don't think this will open below $7 million, so I am going to go for the sweet spot again, just below $10 million for the weekend.

Stock: Long

Call: Short

Put: Short

Update Friday morning: Sorority Row and Whiteout are both tanking. I have a new rule that I don't change positions on Friday morning unless a stock moves by more than 10%. But, since they are both doing that, I am reversing positions and shorting both.

Update Monday morning: Well, I should have bet against Tyler Perry, or at least against the overpriced options; his movie debuted at $24 million, a solid opening, but nowhere near $30 million. The stock adjusted down, by about H$7, not a bad fall, but a drop that I missed. All the other openers adjusted down, as well. I got the stock and the call right on Sorority Row, but I was not pessimistic enough about, so I missed the put. Both that and Whiteout opened at about $5 million, way off the respective $10 strike prices. No sweet spots for any of them. But I got Whiteout exactly right, so I got 5 out of 9 this weekend. 9 the movie opened slightly below expectations, and I was wrong on my picks in my portfolio, but since I didn't write about those here, I am not counting them. So I was above .500 for the weekend, but not by much.

August 14, 2009: Bandslam, Ponyo, Time Traveler's Wife, The Goods, District 9

August in Hollywood used to be like France: nothing happened, people went on vacation. August was a dumping ground for bad movies. All of the summer blockbusters had been released, multiplexes were crowded, kids starting going back to school. Studios felt that there wasn't much in the way of opportunities to make money, so they released movies with little or no potential that they just wanted to clear out of their inventory.

But then the smart studios started counterprogramming against the bad movies. If every other movie being released in a certain month is probably bad, you can attract attention by releasing a good one. Now things are a little more balanced. Studios also have many more options for releasing bad movies - they can send them to cable, straight to video, or do a very limited release. Digital projection helps in this regard. One of the major costs for releasing a movie is making the actual prints that are shown in theaters. But digital projection does not require making a print, so the studio can just push a button, release a movie on 1,000 screens, make at least some money, and hope that enough people like it to make more money on the DVD sales.

We've got five very different movies this weekend; a romantic drama, an animated movie from Japan, a cheesy tween movie, a sci-fi action/thriller, and a low-budget comedy. Some of them are even promising.

Starting with the movie I am least likely to see, we have some cute underage performers in "Bandslam" (BSLAM), about some high school students in a band. I suspect there is malicious gossip involved. About the only thing that caught my eye is that David Bowie is in the cast. Why? I have no idea, and I seriously doubt that I will find out. The trailer seems mostly harmless, with a couple of good lines. There must be an audience out there for this. The stock is all the way up to H$19, so some studio executive is praying that they can break even on a what, $10 million budget? Strike price is H$10, which is just not right. H$19 predicts a $7 million opening weekend. The call (BSLCA) is, somewhat surprisingly, above H$1, although not by much. The put (BSLPU) is somewhat more realistically above H$3. It's opening on 2,121 screens, not a real wide release, but decent. It is - and this is a pleasant surprise - at 80% on rottentomatoes.com. So maybe it's actually a good movie. I think the stock will probably open to somewhere between $7 and $9 million, just because it looks it is competently directed, even if the plot, etc., feels rather stale.

Stock: Long

Call: Short

Put: Long

'Bandslam' Theatrical Trailer @ Yahoo! Video

In the very small "foreign animated" niche, Walt Disney is releasing "Ponyo" (PONYO) from Hayao Miyazaki. I don't think I've ever seen one of his films (a major gap in my film knowledge, but one of several), but his reputation is that of a genius, so this will have a devoted following. It's at 95% on rottentomatoes.com, which is actually what I expect. There are no options, and the stock is around H$7. Buy and hold - this will probably adjust above the delist. It could easily clear $3 million.

Stock: Long

'Ponyo' Theatrical Trailer 2 @ Yahoo! Video

In the very broad "romantic drama" segment of the market, we have "The Time Traveler's Wife," (TTRWF), about a woman who marries a guy who travels randomly through time, showing up and disappearing at unpredictable moments. Certainly is an interesting concept. It stars Eric Bana and Rachel McAdams, both of whom have been flying just under the radar, waiting for the right role to turn them from somewhat well-known to really famous. This might do it for both of them. The stock is at H$53, down today, but very near its high. It has, however, been incredibly volatile. Strike price is nicely set at H$20, just right. The call (TTWCA) is above the IPO price, almost H$3. The put (TTWPU) is around the same price, although neither is a strong indicator. It's opening on just shy of 3,000 screens, so at least the studio believes in it. Only 37% of the RT critics like it so far, which is not encouraging. Certainly not a guy movie, but women might like it. But last weekend, it took Meryl Streep to pull in $20 million for a chick flick. I don't think there will be many surprises on the upside for this one. $17-19 million is my prediction.

Stock: Short

Call: Short

Put: Long

'Time Travelers Wife' Theatrical Trailer @ Yahoo! Video

In the somewhat narrower raunchy, politically incorrect comedy category, we have "The Goods: Live Hard, Sell Hard" (TGDRS). Jeremy Piven plays a used-car salesman who has to sell 211 cars over the 4th of July weekend to save a dealership. The stock has been rocketing up over about the last 3 months, although it's a shade off the high, to H$20. It's up today, a good sign. The strike price is the low low low H$5, so we can all benefit from some fortuitous pricing. It should beat that easily. The rest of the traders interested in these options understand that, with the call (TGDCA) well above H$3, and the put (TGDPU) sinking fast. It's only being released on 1,800 screens, but the expectations are so low that that's fine. Critics are hating this movie, with only a 12% fresh rating. Too bad for them! This looks like a hilariously cheesy, tasteless movie. I love the trailer, I think it's hysterical. Looks like it is designed to offend anyone with good taste but not a wicked sense of the absurd. I even watched the red-band trailer. It pushes the boundaries of taste, that's for sure, but it's also quite funny. Sounds like a cult classic in the making. Jeremy Piven's line "These people are excited about the savings" just cracks me up. I think $8 million is likely, maybe more.

Stock: Long

Call: Long

Put: Short

'The Goods: Live Hard, Sell Hard' Trailer

A few months ago, I started noticing ads on bus benches around LA that announced that the benches were for "humans only," and not aliens. They barely referenced "District 9" (DIST9). I was impressed by the advertising for a movie I hadn't heard of. Now I have, and boy have I heard of it. The buzz around this movie is world-beating. Harry Knowles, Lord God Emperor of fanboys, calls it "the most accomplished, provocative and intelligent science fiction I've seen in this new century." I find him a tad tedious, but the man does know his movies. The stock has followed almost exactly the same trajectory over the last six months as The Goods, but has reached a much higher level, and is currently just below H$90. It's down today, but that's probably profit-taking from people who have made 100% or better returns in the last three months, which could be quite a few people. The strike price is H$30 - good job, D.Mac - but the call (DS9CA) is above H$6. That means rabid excitement on the trading floor. The put (DS9PU) is below the IPO, but not by much, so someone isn't buying the hype. I, however, am. It's on 3,049 screens, and at 95% among the critics. It's produced by Peter Jackson. Rarely do the stars align like this. I think $35 million this weekend is entirely possible, even with an R rating. I wouldn't be surprised at $40+.

Stock: Way, way long

Call: Long

Put: Short

'Uninvited' Theatrical Trailer @ Yahoo! Video

Update Friday morning: DIST9 is up H$5, a good sign. TTRWF is up H$1.90, which I think is mostly noise, and not all that significant. BSLAM is down H$0.52, which really is noise. TGDRS is down H$3, not a good sign, but that's still about a $7 million opening weekend. I'm still optimistic, and the derivatives are still a good bet. PONYO is up H$1.30, and still has nowhere to go but up. So no changes on my predictions.

Update Sunday night: I was mostly right, or close, except for BSLAM, which turned out to be a total bomb, clearing just over $2 million this weekend. But I did get the options right on that one. DIST9 opened up, although not in the stratosphere, at $37 million, PONYO came in just about on target with $3.5 million, and TTRWF came in right where I expected it, $19 million, although that was slightly below the market's prediction. Finally, TGDRS did in fact drop as predicted by the Friday morning action, with just over $5 million, below my apparently optimistic projection. That was only a H$3 drop, so no big deal, but I did let my reaction carry me away a tad. All in all a good weekend. I am going to keep all of my positions, instead of just shorting everything, except BSLAM, which I am shorting with a vengeance. I think DIST9, TGDRS, and PONYO will delist above the adjusts, while I think TTRWF will drop slightly below. We will see in four weeks!