September 17, 2010: Easy A, The Town, Devil

I'm doing an abbreviated post today, and a day late, because I am dealing with some family stuff that requires my attention.

Easy A: Up recently, but down today. Great reviews, at 82% on RT. Strike price is H$15, and the call is doing well, while the put is below a buck.
Stock: Long
Call: Long
Put: Short

The Town: Same as Easy A: Up recently, down today. Even better reviews, at 92%. You go, Ben Affleck! Same strike price, although there is more of a disconnect between the options and the stock.
Stock: Long
Call: Long
Put: Short

Devil: Down quite a bit recently, not a great sign. From M. Night Shyamalan, although he didn't direct it, and his brand isn't what it once was. Same strike price, but with opposite movement.
Stock: Short
Call: Short
Put: Long

Alpha and Omega is dropping off a cliff. Same strike price again, although it's completely ludicrous. Looks utterly cliched.
Stock: Short
Call: Short
Put: Long

Update Sunday afternoon: Not a bad weekend, considering my abbreviated post. Ben Affleck did quite well, with The Town very nicely exceeding expectations, with $23.8 million, adjusting up almost H$20. Easy A did well, but not quite as well as expected, with $18 million, adjusting down about H$5. At least it beat the strike price. Devil and Alpha and Omega didn't, although the cartoon did slightly better than expected, and adjusted up a smidgen. That means that I got almost everything - 10 out of 12 - right.

July 9, 2010: Despicable Predators

We only have two movies going wide this weekend, Despicable Me (DESME) and a reboot of Predators (PRED3), the action movie from the 80's.

Despicable Me looks like fun. Great title. Great trailer. Stock is at H$100, near the high of H$109. Strike price for the options is H$35, right on target. Call (DESMCA) is at H$4 and a half and rising, a good sign. Put (DESMPU) is below IPO and sinking, another good sign. It's going out on 3,400 screens, a good wide release. Critics are nicely positive, with an 87% rating on rottentomatoes.com. There isn't a CX derivative, since those are being cashed out. The strike price for the Blockbuster Warrant is H$120, with the price currently at H$11 and rising. All the signs are looking good, except for the fact that it's down today. But that could be just noise. I'm intrigued enough by the story to want to see it myself.
Stock: Long
Call: Long
Put: Short
BW: Long

Predator, OTOH, is not looking so good. Stock is at H$70. It's up H$2.50 as of this writing, but down from a high of H$114. That's not good. This also has a strike price of H$35, which is not terribly realistic. The call (PREDCA) is tanking, below H$1.50. The put (PREDPU), meanwhile, is soaring, aiming at H$5. Exactly the opposite of DESME. It's going out on 2,600 screens, not quite as many, but a decent release. Critics, somewhat surprisingly, are positive, with a 73% rating on RT. I know next to nothing about this, since I didn't see the original, and have no intention of ever doing so. But it sounds like the hype has been washed out of the stock price, and we are back in somewhat reasonable territory. Blockbuster Warrant strike price is H$100, and it's about H$2 and change. Which makes a fair amount of sense. So we're looking at about a $30 million opening weekend with this stock price. That would put it just ahead of The A-Team, and it sounds like this is a better movie.
Stock: Long
Call: Short
Put: Long
BW: Short

Update Friday morning: Despicable Me is doing well, up H$3 today, so I am maintaining those positions. However, Predators is down H$8.50, which prompts a rethink of holding the stock long. In a situation like this, I ask myself if there is any reason to bet against the market, and I can't think of one. Sequels and remakes and reboots are not doing well this summer. The biggest name in the cast is Adrien Brody. He's a fine actor, and he's probably fine in this movie, but he's not Arnold and I don't see him as a great lead in an action movie. Reversing position on the stock, shorting it.

Update Sunday afternoon: Despicable Me proved to be a solid performer, with $60 million this weekend, while Predators came in at $25 million. This is very similar to what happened with A-Team and Karate Kid: the family film outperformed expectations by a huge margin, while the action adventure movie came in either below expectations, or just barely above seriously diminished expectations.

I was wrong on the stock for PRED3, which technically adjusted up, but only by H$5. Otherwise I got all of the predictions right this weekend. Anyways, PRED3 is certainly a short to delist.

March 5, 2010: Brooklyn's Finest and something from Tim Burton

Two movies are opening this weekend, Oscar weekend, one a generic cop movie with a solid cast, and the other another visual-effects spectacular from the usually delightfully twisted mind of Tim Burton.

First up, let's look at the cops, Brooklyn's Finest (BRKLN). I have this funny feeling that the title is sarcastic, but I'm not entirely sure. These Finest include Richard Gere, Don Cheadle, Wesley Snipes, and Ethan Hawke. And Ellen Barkin. Good actors all, but none have really opened a movie on their own in at least a few years. Opening on Oscar weekend, it's not being targeted at the arthouse crowd, that's for sure. Stock is at H$31, and has been dropping from a high of about H$40, although my guess is that it has bottomed out. Strike price is H$15, which is rather on the optimistic side, since the stock price predicts an opening weekend around $12 million. The call (BRKLCA) reflects that unfortunate strike price, as it is around H$1. The put (BRKLPU), absolutely unsurprisingly, is above H$3. The CX derivative on HSX is around H$32, after nosediving steeply. It's also at $32 on Cantor. It's going out on 1,900 screens, a decent release, but not great. Reviews are not terrible, but not good - it's at 31% on rottentomatoes.com. I think these prices are all about right, or maybe on the high side. I'm looking for right around $10 million.

Stock: Short

Call: Short

Put: Long

CX on HSX: Short

Cantor: Short

Then there's the big movie of the weekend and the month, Tim Burton's Alice in Wonderland (ALCNW). Lots of anticipation for this one. Price on HSX is just shy of H$200. Strike price is H$70, with the call (ALCNCA) above H$6. Haven't seen that in a while. The put, of course, is underwater, at H$1 and change. The CX derivative on HSX is at H$226, so much higher than the stock. On Cantor, it's even higher, at $235. So the predictions range from about $75 million to $87 million. It's going out on a very wide number of screens. But the critics' reviews range from merely decent to downright savage. It's at 57% on RT, but it's a very weak 57%. I have a couple of problems with it. First, there are a couple of famous faces (Johnny Depp, Helena Bonham Carter, Anne Hathaway), but they are hidden beneath lots of makeup and CGI. That takes away a certain part of their appeal, notably that they are very good looking. It's in 3D, which of course raises the box office potential, but it wasn't shot in 3D; those effects were added in post. Tim Burton definitely has a very active imagination, the kind that creates worlds suitable for 3D, but I'm not sure he has the technical chops that, say, James Cameron does. The story is apparently quite different from Lewis Carroll's original. In some sense, that doesn't matter, because most people are only vaguely familiar with the story in the first place. But the replacement story sounds very generic-Hollywood. It's supposed to be a kids' movie, but I'm not sure I see this appealing to many kids. I think it will have a huge opening weekend, but then drop quickly.

Stock: Long

Call: Long

Put: Short

CX on HSX: Short

Cantor: Short

Update Monday night: Boy do I feel stupid. Hopefully this will go down as one of the worst mistakes of my movie stock investing career, because I hope I never make another doozie like this one. Shorting a huge blockbuster - what was I thinking? And less than a month after I got burned the same way on Valentine's Day. This is certainly a humbling business. I should have asked the classic question: is there more potential on the upside, or the downside? There was virtually no potential on the downside - this movie was pretty much a lock to make at least $70 million. You had four great brands working here - Disney, Tim Burton, Johnny Depp, and Alice in Wonderland. Certainly was a learning experience. It adjusted from H$205 to H$314. Brooklyn's Finest also adjusted up, although that was not really as surprising.

The big question is - how will ALCNW do over the course of its run? Movies with openings like this tend to drop over time. I'm staying with my short, in the hopes of somehow salvaging some kind of money from this. Also, there are some seriously strong negative reactions on Yahoo!, so I have the feeling the word of mouth will not be that great.

Update from last week: I was wondering how 2COPS and CRAZI would hold out long term. My bet was that CRAZI would benefit from a higher PSA, because fewer movie theaters would pull it. Looks like I completely misread that - 2COPS didn't lose any theaters, and CRAZI only added 3, a miniscule change. Another lesson learned.