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.

October 28: Michael Jackson's This Is It

There's only one movie opening this week, and it opened on Wednesday: Michael Jackson's This Is It (JACKO). So I missed it, since today is Thursday. C'est la vie. It closed at H$123, which seems very high, since it is only going to be showing for two weeks (although that could be extended). Strike price is H$35, and the call (TIICA) was through the roof at close, at H$7.85, while the put (TIIPU) was sinking, down to H$1.22. I hope everyone had this long!

Note, however, that it has been dropping on Cantor Exchange. It was around $150 a few days ago, now it's back down to the HSX price. It's down $14 today, so reality may be setting in. Then again, it may be incredibly cheap.

Here's the trailer.

Update Tuesday morning: I had technical problems with my Internet connection over the weekend, so I couldn't update. I was decidedly undecided about This Is It. I had a feeling the stock was way overpriced, because of the hype surrounding him, but I wasn't sure, because this is such an unusual situation. Should have been a little more skeptical: it only did $21 million this weekend, nowhere near $35. I should have remembered the question I ask about movies with high prices: what are the odds that it will go up from here? The odds of it adjusting up were not as good as the odds of it adjusting down. Yet another lesson learned.

September 25, 2009: Surrogates, Fame, Pandorum

Three simple one-word titled movies this weekend. HSX is experiencing technical difficulties as I write this, so I'm not sure I will be able to comment on how prices are changing today. Regardless, here we go. This week we see a continuation of last week's trend, i.e. movies that are suffering from a post-summer hangover. Not a great sign.

First up, at least in terms of potential, is Surrogates (SUROG), a futuristic sci-fi movie about a world in which human beings interact with each other through surrogates, or robots. A terrorist wants them to reconnect through good old-fashioned human flesh. I think we've seen something like this before, at least vaguely. An allegedly utopian future which is actually dysfunctional, and robots are somehow the problem. Not high on my list. Bruce Willis stars in it, apparently because he didn't have anything better to do. Stock has dropped from a high of H$69 to the current H$51. It's opening on 2,700 screens, which is a good solid release, but not as wide as possible. There are only 2 reviews on rottentomatoes.com, which suggests that it has not been screened for critics. That's a tad surprising, and not good. The strike price is H$25 ,which is absurd for a stock with this recent history and this current price. Call (SRGCA) is H$1.22, and I am surprised it's that high, although that could be because trading is frozen. Put (SRGPU) is at H$3.56, and even that is cheap. Comingsoon.net predicts $22 million. I think that's a little high. but $20 is certainly possible. Maybe it's even a good movie. Maybe.

Stock: Long

Call: Short

Put: Long

SURROGATES trailer in HD


Next up is a remake of a movie that went on to become a TV show and then a theater production that toured the country for years. So there's some brand awareness for Fame (FAME). The idea is certainly a known quantity; it's an excuse to see lots of hot young people gossiping, crying, fighting, flirting, and occasionally singing, dancing and having a great time being highly talented young people in New York. This stock has dropped as well, from H$45 to H$35. Strike price is H$15, not unreasonable. Call (FMECA) is at H$2 and change, while the put (FMEPU) is below H$2. It's going out on 3,000+ screens, and the studio (MGM) desperately needs a hit. But the reviews are savage, with only 25% on rottentomatoes.com. I found this tidbit interesting: the screenwriter has disavowed the movie. Things that make you say "Whoa!" Haven't heard that in a long time. In 1981, when the original came out, there weren't a lot of opportunities to see young people signing and dancing and gossiping. We don't have much lack of that these days.

Stock: Short

Call: Short

Put: Long

(Video is not currently available, I'll post it when it is).

Finally, Pandorum (PNDRM) is another futuristic sci-fi thriller (I know, "futuristic sci-fi" is just about redundant) about two guys on a space ship. They make a discovery that "could threaten the existence of mankind." Of course they do. What other plot twists would even interest moviegoers these days? Once again, it's tanking, from H$30 to H$20. Strike price is H$10, and, again once again, what seemed reasonable three weeks ago is now ridiculous. It's not going to make $10 million this weekend. Traders have realized this; the call (PNDCA) is below a buck, while the put (PNDPU) is above H$3. It's on 2,400 screens this weekend, and I think many of those screens are going to be very empty. It's not being screened for critics, but that makes perfect sense for this one. There are no reviews on rottentomatoes.com. $6-$7 million.

Stock: Short

Call: Short

Put: Long

'Pandorum' Theatrical Trailer @ Yahoo! Video

The September Slump continues, all three stocks adjusted down. SUROG did $15 million; not bad, but not good for a Bruce Willis action movie. FAME managed $10 million, barely avoiding the "bomb" territory, but also avoiding the "hit" territory. PNDRM did land squarely in bombsville, with a grand total of $4.4 million. I got almost all of my predictions right (8 out of 9!), I missed SUROG, but that only adjusted down H$5, so not a big miss. The one thing I did miss, which was not good, was actually adjusting my positions on HSX to match my predictions; I had gone long on all of these before, and was planning to change that after my analysis. But HSX had technical trouble, and I was called in to work on Thursday night, so I didn't have a chance to change. I worked until 1:00 am, and then slept in past 10, so I didn't get to short everything Friday morning. Gotta pay more attention to that alarm clock on Friday mornings.

August 28, 2009: Two Horror Movies, and Woodstock

OK, this is the kind of weekend August is famous for: a dumping ground for movies the studios don't know what to do with. Going against the counter-programming grain, the two big studio movies being released this weekend are both horror flicks. Isn't there a bad teen sex comedy sitting on a studio shelf somewhere? The other release takes advantage of the 40th anniversary of Woodstock, because of course there is always a shortage of Baby Boomer nostalgia in the world. The 60's! Again! Since there are still Baby Boomers alive, their youth is still being marketed to them. And the rest of us still have to live through it.

Question of the day: Why do we keep seeing sequels to a movie called "Final Destination"? Wasn't it "final" the first time? Apparently not, because "The Final Destination" (FDES4) (maybe the addition of a definite article means that it really is finished?) is the fourth in the franchise. Since I barely knew there was a franchise, I'm probably not the best person to comment on its BO potential. But the numbers are mostly good: it's on the requisite 3,000+ screens, the stock has been rising very steadily, to H$54, and the call (FD4CA) is up to H$3.56, against a strike price of H$20. The put (FD4PU) is below the magic price of a buck, so options traders are very optimistic about this one. I have no idea what critics think, because there is so far a grand total of one review on rottentomatoes.com. Not terribly surprising that it hasn't been screened for critics. Just based on the numbers, let's bet lots of teenagers will want to see their fellows whacked creatively.

Stock: Long

Call: Long

Put: Short

The Final Destination trailer in HD

It's hard to add another layer of artificiality and superficiality to a horror movie sequel, but someone just pulled it off: Halloween 2 (H2) is the sequel of a remake. Got that? Rob Zombie is finding ways to postpone any kind of original thinking in terms of character or setting. Just keep that franchise going any way you can! I can't wait for the "reimagining" of the remake of the sequel to the remake, which had lots of sequels. Oddly enough, this one is being released two months before Halloween. Marketing 101, anyone? Or would releasing the 53rd or whatever variation on the theme of Halloween on the actual day be just a little too cliched? Maybe we shouldn't think about it. The stock reached a high a few clicks above Final Destination, H$61, but has since drifted lower than its competition, and is down H$3 for today, to H$49. The call (H2CA) is close to H$4, but down a smidgen today. The put, however, is floating another smidgen above the IPO price, currently at H$2.13. So some traders are pessimistic. It's on roughly 3,000 screens, but there are even fewer critics at rottentomatoes.com, and fewer than 1, of course, equals zero. Sigh. There are only so many horror movie fans in the world, and the numbers suggest that they are going to be going to The Final Destination. It is in 3D, maybe blood coming out of the screen will make a difference. Releasing a movie called Halloween before Labor Day strikes me as a little too proactive.

Stock: Short

Call: Short

Put: Long

Halloween II


Ang Lee has made a movie about Woodstock, "Taking Woodstock," (WDSTK) presumably because he believes that the 400,000 people who were there have not told their stories often enough to the several hundred million people who weren't, but who wish they had been. The trailer is charming, the cast is solid, and Ang Lee is a great director. But I have no interest. Maybe there are some Baby Boomers still hung up on their youth, but it doesn't look like they play HSX: the stock is tanking, down from a high of H$22 to H$17 today. The call (WDSCA) is following a similar trajectory, at H$2.39, against a strike price of all of H$5. The put (WDSPU) is around the same price. I'm shorting both, because I think the opening BO will be right around $5 million, right near the strike price, dead on between the call and put. I'm sure it will be an entertaining experience, because how could you not have fun watching one of the biggest parties ever? On the other hand, there won't be much drama, because we all know how it ended. We all know that really, really well.
Stock: Short
Call: Short
Put: Short

'Taking Woodstock' Theatrical Trailer @ Yahoo! Video

Update Friday morning: FDES4 is tanking, down H$3, not a good sign. H2 is up less than a buck, which is noise, and not significant. I found reviews of both movies (from Thursday midnight screenings) on Ain't It Cool News. Both movies are apparently terrible, and these reviews will have an impact. FDES4 is spectacularly bad, and H2 apparently isn't much better. The fact that they are both sequels, and one is a sequel to a remake, sends the very strong, and very wrong, signal that Hollywood is not interested in making original movies. Which is really, really bad marketing.

So I am changing my position on FDES4, shorting it, shorting the call, and going long on the put. Keeping my position on H2, and not changing anything about WDSTK, because I don't think one day is going to change people's opinions about something that happened 40 years ago.

Update Sunday night: So my original decision on FDES4 was the right one, so I feel a little stupid. It made $28 million this weekend, confirming how little I understand the appeal of these movies. My other bets were right, H2 dropped, although just H$5, and WDSTK didn't quite break $4 million.

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!