August 27, 2010: The Last Exorcism, Takers

It's the dog days of August, and that means slump time. Dumping time. Get rid of all your trash before the fall starts. So we're not real excited about the movies coming out tomorrow. But we're going to do our best to evaluate them.

The first shall be last, and the last shall be first. Thus the first movie up this week is The Last Exorcism (LXORC). It's a horror movie about a priest and an exorcism. Always good for some scares. The stars - such as they are - are total unknowns, as is the director. At least they are all total unknowns to me. Of course, this may be because I have zero interest in horror movies. I do have an interest in this stock, which has been climbing quite nicely and steadily. It's at H$40, down just a bit from the high of H$44. Strike price is H$10, which is absurdly low, given the stock price. So we have a situation once again where the options are not hard to predict. The call is at H$6 and change. Haven't seen that for a while! The put is at H$0.57. Haven't seen that in a while, either! It's going out on 2,800 screens, which is a good solid release. Critics are pleasantly surprised, with a 65% rating on rottentomatoes.com. All signs point to some good potential on the upside, like $14-$16 million.

Stock: Long

Call: Long

Put: Short

Not quite as many people are taken by Takers (TAKER) the other big opening this weekend. This does have a cast of recognizable stars, but not really anyone who can open a movie. Didn't we just see Matt Dillon in a heist movie? Didn't we just see Zoe Saldana in a cheesy action movie? Stock is at H$28, and the strike price is, again, H$10, although this time that is dead-on. The call is slightly outpacing the stock - it's closing in on H$3. The put is closer to the stock, just below H$2. It's going out on 2,200 screens, so the studio is playing it a little safe. Critics are not enthused, with just a 29% approval on RT. Not expecting any surprises here, in either the movie itself, or the box office. I'm guessing it has some marginal room to move on the top, but I'm looking for the sweet spot on the options, right around the strike price, at $10 million.

Stock: Long

Call: Short

Put: Short

Both stocks are up this morning a shade over H$3. Looking good for the last week of August. Maintaining all positions.

Two nice surprises this weekend. Both movies opened at aboout $21 million, way above the strike prices, and, for Takers, way above the price predicted by the stock, although the momentum was clearly up. The only prediction that I missed was the call on Takers, but it's always very risky predicting the sweet spot. Otherwise a very good weekend.

August 20, 2010: Taking a break

I am taking a break from predicting movies this weekend, because it's the middle of August, which means that we are past summer blockbuster season, but not yet into the holiday/awards movies season. So the movies coming out this weekend are not terribly interesting. And, honestly, I just don't want to spend any more time than I absolutely have to about a movie called "Vampires Suck." When one of the more interesting movies opening on a weekend is a Jennifer Aniston romcom that is tanking badly, you know it's bad. Best of luck to Emma Thompson, but, since I don't have small children, I don't have much interest in Nanny McPhee. See you next week.

August 13th, 2010: Scott Pilgrim Eats, Prays, and Loves the Expendables

We have three very different movies opening on this Friday the 13th.

First up is The Expendables (XPNDB), just about the purest example of an action movie we've seen in a while. Absolutely no pretense here: this is about tough guys, fists, knives, guns and explosions. Plus the occasional damsel in distress and snarky put-down. Stock has been extremely volatile, currently resting at H$85, up 50 cents for the day, but down from a high of H$112. No gently sloping bell curve here, the chart looks like an EKG. The strike price for the options is H$25, which predicts a stock price of about H$67. So that seems low. Call is at H$5 and climbing, put is below a buck. It's going out on 3,200 screens. Critics aren't very excited, with only 44% on rottentomatoes.com, but that's not a surprise. No Blockbuster Warrant, probably because there isn't much time until the BWs delist. It's old-fashioned, but I'm sure it will have a certain appeal. Needs H$31.5 to meet the stock price. I'm optimistic, but I am going to keep an eye on this tomorrow.

Stock: Long

Call: Long

Put: Short

Julia Roberts is back in a starring role in a movie that may or may not be a romantic comedy. It sure looks romantic, but I'm not sure it's a comedy. Eat Pray Love (ETPLV) is based on a book that neither I, nor, I suspect, many men have read. But I'm sure it's wonderful. I have no problems whatsoever with women's literature focusing on relationships, because relationships are very important. This stock has been climbing quite steadily. It's at H$62 today, but a bit, but not far from the high of H$66. Strike price is again H$25, which is just right. The call is just above H$2, while the put is closing in on H$3.50. Going out on 3,000 or so screens. Critics aren't very excited with it, just 42% giving their approval on RT. This movie is an interesting contrast with XPNDB: one features an ensemble cast, and is about as macho and testosterone driven as possible; one is about as woman-centric as possible, and stars just one woman. Not a coincidence that they are opening opposite each other. The one thing that confuses me is why a guy (Ryan Murphy) was chosen to direct this. I'm sure he's good, but this feels like it probably could have benefited from a woman's touch. Either way, I'm not betting against Julia Roberts, a huge bestseller, lots of gorgeous scenery, and some nice men being nice to a movie star. Critics are complaining that it's self-indulgent. I think that's the point.

Stock: Long

Call: Long

Put: Short

Aiming, of course, at a completely different crowd, is Scott Pilgrim vs. The World, based on a comic I've never heard of. Michael Cera, who is defying all kinds of conventional wisdom by maintaining his status as a movie star, is Scott Pilgrim. He falls in love with a girl, but then has to battle her seven evil ex-boyfriends. Great premise, that's for damn sure. It's ridiculously stylized, with great graphics and CGI. Stock (SPILG) is not doing that well, crashing the last couple of weeks, down to H$54, from a high of H$81. Sounds like the hype got the better of a few people. Strike price is H$25, which doesn't seem very realistic any more. It's going out on 2,800 screens, a marginally more conservative release than the other two, but actually somewhat optimistic, given that it has sort of an indie feel. Critics are very impressed, with a 76% rating on RT. I am betting against the market, because at the end of the day, one thing matters above all else when making these predictions: is it a good movie?

Stock: Long

Call: Long

Put: Short

Update Sunday night: I took a risk on Scott Pilgrim, partially because it was getting great reviews, partially because I like the idea, and partially just for the hell of it. Now that this game is back to being irrelevant, what with that whole overreaction by the MPAA and their friends in Congress, I wanted to take a position and stick with it just for the hell of it. So that's now out of my system. At least I hope. The Expendables did as the market predicted, coming in well above the strike price, at $35 million, adjusting up to H$94. Nicely done, Mr. Stallone. Julia Roberts came in just under the strike price, but almost exactly at the stock price, earning $23 million, and adjusting up a grand total of 32 cents. Nicely done, HSX traders. Scott Pilgrim did better than most arthouse flicks, but not as well as the other movies this weekend, bringing in a grand total of $10.5 million, and adjusting down by H$21, from H$49 to H$28. Still, I'll hold that long to delist. Also going long to delist on Julia, but shorting Sly and Co., because that looks like a flash in the pan.

Week of August 6, 2010: The Other Guys Step Up

I am posting this late because my Internet service is down at home. So this is a Friday morning update, as well as a regular post. We have two movies opening this weekend, both with less-than-blockbuster expectations.

First up is Step Up 3D, third in the dance movie series. Full disclosure: I haven't seen any of these movies, and probably won't be seeing this one. Fuller disclosure: the director, Jon Chu, went to USC film school around the same time I did. I don't know him, but we have friends and acquaintances in common. Stock is doing reasonably well, at H$44, up H$1 and change today. That's below the high of H$50, but not much. There hasn't been much of a dropoff with this one, which is good. Strike price is H$15, which is exactly right. Call is at H$2 and a smidgen of change, so there's a bit of optimism there. Put is at exactly the same price, H$2.13, but is down, whereas the call is up. So we see some trending upwards. No Blockbuster Warrant, although I'm sure it will do much better than one of the movies that DID have a BW, Jonah Hex. Critics are not enthused, with only a 50% rating on RT, and even some of the positive reviews damning with faint praise. But this sounds like pretty much what you expect: an excuse for lots of hot young people to move in really exciting ways. It's going out on 2,400 screens, also exactly as expected. Fullest disclosure: the only person I know who saw the first one was my Mormon aunt in Utah (who has 8 grandchildren). She loved it. I'm not betting against my Mormon aunt or my fellow USC alum.
Stock: Long
Call: Long
Put: Short

The other movie opening this weekend is The Other Guys (OTHRG), starring Marky Mark Wahlberg and Will Ferrell as two bumbling cops. It's been done before, but it's also good to see Will Ferrell back doing what he does best. Stock is at H$86, down from a high of H$125 - yet another victim of overhype. Seen that a few times this year. It's down this morning, but only 50 cents. Strike price is H$30, also dead-on. Nice to see HSX nailing that. Call is at $3, heading towards H$4, while the put is below H$2 and heading farther south. Optimism in the options. Critics are quite enthusiastic, which is an excellent sign, with 79% approval on RT. It's going out on 3,600 screens, a great wide release. The only competition is Dinner For Schmucks, which does not seem to have as much momentum. I know many people who would love to see a great comedy, including me.
Stock: Long
Call: Long
Put: Short

Update Sunday night: Just about nailed this one. Not quite, but close. The Other Guys came in at $35 million, and adjusted up H$10, to H$96. Step Up 3D brought in H$15.5 million, almost exactly the strike price. It adjusted down H$3, which is trivial. So I got all of the options right, although I would have made more money shorting the call on STUP3. Still, it was a good weekend.