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 4, 2009: Armored, Brothers, Everybody's Fine

Good collection of movies this week, one standard action adventure flick, one war movie, and a family dramedy featuring Robert De Niro.

First up is Armored (ARMRD), about an armored car heist. Always a fun topic! It's got a solid cast, including Matt Dillon and Laurence Fishburn, although the director has the unfortunate name of Nimrod Antal. The stock has been moving up quite steadily, but dropped about a week ago. It hit H$35, and is currently at H$25 on HSX. On Cantor Exchange, it has had roughly the same tragectory. The CX derivative on HSX, on the other hand, has sunk like a stone in the last few days, and hasn't come back Strike price is H$10, and the call (ARMCA) is dropping, down below the IPO price. That makes sense. The put (ARMPU), meanwhile, is marching in the opposite direction, heading towards H$3. It's only going out on 1,900 screens, so it's not a very wide release. There's only one review on rottentomatoes.com. I'm not sure if that's because it's early (I'm writing this on Wednesday night), or because the studio doesn't plan on screening it. If it's the latter, watch out. There aren't a lot of good cheesy action movies out right now, with the possible exception of Zombieland, and that's already gone. Even if it's not that good, it should pull in at least $10 million this weekend.
Stock: Long
Call: Short
Put: Short
CX on HSX: Long
Cantor: Long

'Armored' Theatrical Trailer @ Yahoo! Video

Next up is Brothers (BRTHS). This one is a little more intense. It's about a pair of brothers, one of whom goes to Afghanistan. I'm going to end the description right there. It looks rather intense. Stock has been going up steadily, currently around H$20. The strike price is about as low as possible, H$5, with the call (BRHCA) optimistically trading above H$3, and the put (BRHPU) around H$2. This is interesting: The CX derivative on HSX is at H$18, but the stock on Cantor is at $33! That's a hell of a divergence. It's rolling out on 2,000 screens. It's only scoring 50% on RT. It's got a good cast, but the story seems like a downer, particularly with President Obama's decision to send another 30,000 troops to Afghanistan. The track record of war movies about Iraq or Afghanistan is not good. I would be surprised if it does more than $7 million.
Stock: Short
Call: Short
Put: Short
CX on HSX: Long
Cantor: Short




Finally, Robert De Niro stars in a quiet family drama as a widower reconnecting with his kids. This looks like quality. It's nice to see De Niro in a sober, simple movie. He deserves something like this. The title, Everybody's Fine (EBFIN) sounds like it both is and is not ironic. It's one of those things that you say sometimes because it's true, and sometimes because you hope it's true. The stock has been marching up, but is still only at about H$16. Mr. De Niro and friends are going under the radar. Except on Cantor, where the price is $27. Strike price is H$5 - not very high expectations for this week's releases! - with the call (EBFCA) doing reasonably well, and the put (EBFPU) tanking, as expected. The CX option on HSX is almost exactly in line with the stock, a good sign. It's the widest release this week, although it's only going out on 2,200 screens. It's at 57% on RT, a solid rating, if not great. It feels like a good holiday movie for people who want something without histrionics.
Stock: Long
Call: Long
Put: Short
CX on HSX: Long
Cantor: Long

'Everybodys Fine' Theatrical Trailer @ Yahoo! Video

Update Monday morning: Well, I was wrong about all of the stocks, but not by much. Armored and Everybody's Fine turned out to be duds, while Brothers did slightly better than I expected. Apparently the weekend after Thanksgiving is a traditionally slow one, so studios tend to release weak movies this weekend. That's another thing I learned. It makes sense, tho, since the big Thanksgiving weekend movies are still popular, and taking up a lot of screens. Overall, I got 5 out of 15 calls right. But next weekend, things should be heating up quite a bit.