Week of October 8, 2010

It's been a long week, so this will be a short post. Also, none of the movies opening this week have really peaked my interest.

Easily the most interesting movie this weekend is Secretariat (SCTRT). It would be a very cheesy movie if it weren't based on a true story. Even I remember Secretariat, and I know nothing about horses. I also like Diane Lane, and of course John Malkovich is always fun to watch. The stock tanked for a while, but it's back up. Strike price is H$15, with the call doing quite well, and the put barely above IPO. Critics mostly like it, with a 61% rating on RT. What you see is what you get with this one. Disney does these well.

Stock: Long

Call: Long

Put: Short

Look, it's another Katherine Heigl romantic comedy! Sigh. I like Katherine Heigl, I think she's drop-dead gorgeous and funny, and very charming, but Life As We Know It (LAWKI) is dropping like a rock. This is about the worst possible time for me to be even thinking about a movie with this premise.

Stock: Short

Call: Long

Put: Short

Look, it's another Wes Craven movie about teenagers being terrorized! I managed to watch the trailer, and even I wasn't that scared. Sorry, Wes, not going on this ride.

Stock: Short

Call: Short

Put: Short

Update Friday morning: all 3 are down, but Secretariat is only down slightly, while the other 2 are down at least H$2. Maintaining all positions.

Update Sunday night: It wasn't a good weekend for me, but that's not surprising, since I didn't spend a lot of time on these predictions. Secretariat adjusted down, Life as We Know It adjusted up slightly, and - at least I got one right - My Soul To Take dropped, pulling in all of $7 million. Note: It's Kind Of A Funny Story also opened wide, I guess, but I didn't predict it, because I didn't think it was opening wide. It dropped like a rock, but it's getting some good reviews.

September 3, 2010: Machete, Going the Distance

I missed predicting the opening for The American, because I was out of town. Oops! But there are still two movies left on which to opine. It's Labor Day weekend, but this doesn't feel like a great weekend for movies. Note: Because of the holiday, the adjusts will happen on Monday, and the multiplier will be 2.2, instead of 2.7. Doesn't change much, but always good to note that.

First up is Machete (MCHTE), from Robert Rodriguez, based on a trailer from that movie he did with Quentin Tarantino. Stock isn't doing that well, the price has dropped off a cliff, dropping from H$64 in late July to H$41 today. That is up from the low, but still, not a great sign. This is certainly Robriguez's bailiwick, cartoonish violence with a Mexican hero. Strike price was unfortunately set at H$20, which now looks somewhat on the wrong side of realistic. Call is, as expected, below the IPO price, while the put is way above the IPO. Critics are surprisingly positive, with a 69% rating on RT. The trailer is pretty much one long series of gunfights and explosions, but the ending is very funny. It's going out on 2,600 screens, not the widest release, but not a bad one either. Looks like the hype has been wrung out of the stock, and it looks like fun. Utterly formulaic, but fun. Rodriguez knows a thing or two about this kind of movie.

Stock: Long

Call: Short

Put: Long

Justin Long and Drew Barrymore star in Going the Distance (GDIST), a romcom about two people in a long distance relationship. I like both of them, I generally like romantic comedies, and I've even tried a long distance relationship (although it didn't work out), but this isn't grabbing me. Apparently many people are feeling the same - it has also dropped off a cliff, falling from H$45 to H$30. This one, however, doesn't seem to be recovering. Strike price was, again, optimistically set at H$15, and, again, that doesn't like it's going to happen. Call is sinking fast, while the put is, again, above H$3. Critics aren't very enthusiastic, with only a 38% rating on RT. It is going out on 3,000 screens, but that just provides a slight cushion.

Stock: Short

Call: Short

Put: Long

Update Monday night: A pretty good weekend. I was off on Machete, it only brought in $14 million, and adjusted down, to H$30, from H$37. Got the options right on that one, tho, although that wasn't hard. I did nail GDIST, only cleared $8 million - on a four-day weekend! - and adjusted down, from H$32 to H$18. I like Drew Barrymore, but I have the feeling she might need to do something a little riskier or at least more interesting than a romantic comedy with a thin premise. Overall, I got 5 out of 6 right.

June 4, 2010: Get Him to the Greek, Killers, Marmaduke, Splice

We have a bumper crop of mildly interesting movies this weekend, but I don't have a lot of time, so I am going to bang through these fast.

Get Him to the Greek (GHGRK). I have zero interest in this film. It's tanking, currently at H$53, down from H$75. A $20 million opening is possible, although the strike price is H$25, with the call about H$1, and the put above H$4. CX derivative is H$60 and dropping. Reviews, however, are very good, with a 74% rating on RT. OK, I'm a little more interested.

Stock: Long

Call: Short

Put: Long

CX: Short

Killers could be a great bad movie, but I'm not sure it could be a good movie. I love Katherine Heigl, I think she's incredibly gorgeous, but I'm not completely sold on her as an actress. And I am really not sold on Ashton Kutcher as an actor. But this looks like it could be fun. Stock (5KILR) is H$48, down from H$68, but up H$4 today, so it probably bottomed out. Strike price is the same at Greek, H$25, with the same results: call is dropping, below H$1, and the put is, again, above H$4. CX is also tanking. There are no reviews on RT, which means that it didn't screen for critics.

Stock: Short

Call: Short

Put: Long

CX: Short

I am utterly void of interest in Marmaduke (MARMA). From H$74 to H$45 - another slide. Another H$25 strike price, with the call barely above a quarter (H$0.31) and the put, again, above H$4. CX following same trajectory: H$74 to H$50. Only 3 reviews, so, also again, no critics' screening.

Stock: Short

Call: Short

Put: Long

CX: Short

Splice (SPLIC) is the one movie this weekend with some potential to break out. Stock is at H$26, but that's near the high of H$30. Strike price is H$10, with the call aiming at H$3, and the put just barely above IPO. No CX derivative. We could have a winner here.

Stock: Long

Call: Long

Put: Short

Update Friday morning: There are now enough reviews on RT to make a judgment about Marmaduke, and boy, it ain't pretty. 10%. That's right around complete bomb territory. Everything is down this morning, so maintaining the shorts on the dog movie and Killers looks easy. Splice is also down, although just a bit. It's had such a great run up, I'm not surprised that it's taken a hit. $10 million feels high for that movie, but it's going out on 2,400 screens, so I am going to take the risk that we will be pleasantly surprised. I'm also nervous about GHGRK, but the reviews are holding up. Maintaining all positions.

A middling weekend for a bunch of middling movies. My optimism for GHGRK was slightly misplaced; it opened at $17.4 million, adjust down just H$2, to H$47. Still, I was wrong on the stock. Killers opened below that, as expected, with $16.1 million. It actually adjusted up, albeit just barely, from H$42 to H$43. However, that's below where it was when I called shorting the stock, so I am going to give myself credit for that one. Marmaduke opened with $11 million, way, way below that H$25 strike price. Called that one perfectly. My nervousness about Splice turned out to be justified, it opened with $7.45 million. I got 11 out of 15 right, actually quite a nice record for the weekend, although I botched Splice. A large part of the reason for that record was the unfortunate strike prices, which made it easy to predict the options for 3 of the 4. My mistake on Greek and Splice was giving a little too much credit to some very insubstantial buzz. The average of the user reviews on Yahoo! for Splice is C+. OK, that sucks. The others are B to B+. Shorting all to delist.

May 27, 2010: Sex and the City 2

Sex and the City 2 (SATC2) is opening tomorrow, Thursday, so this post is just about that movie.

I'm actually not a bad person to be thinking about this movie, despite being a straight white male who doesn't have a girlfriend who desperately wants to see this. I did see the first movie, on opening night no less, with several friends. I liked it, and appreciated the franchise. I get it. I'm somewhat proud of the fact that I understand the appeal despite the fact that I do not find Sarah Jessica Parker all that appealing. I do have a lot respect for the fact that she's done wonders with this concept. And my sister absolutely loves SATC, and she's got very good taste.

For today, however, our concern is tomorrow. The stock is at H$146, down H$3 today, and down from a high of H$165. The adjust formula is complicated (previous B.O. + (2.2 x Fri-Mon)), both because of the Thursday opening, and the holiday weekend. Assuming a Thursday total of about $5 million, that stock price predicts a Friday-Monday total of $63 million. That's a chunk of change. The call (SEX2CA) is at H$4 and change, so there is a certain amount of optimism out there, while the put (SEX2PU) is above H$3. So there is a certain amount of pessimism, as well. The CX derivative is tanking, down from H$185 to H$155.

It's going out on about 3,500 screens, which translates to a PSA (per screen average) of $18,000. The original opened with $57 million, so the sequel would have to do better than the original. But the reviews are horrible - I would describe them as "savage," but I'm not sure that's harsh enough. It's at 15% on RT. I'm also deeply skeptical of the premise. Carrie and Big are married, and they're not that excited about it. And this is exciting why? The girls fly to Abu Dhabi for a good time. Is anyone besides me bothered by the fact that a movie called Sex and the City 2 takes place in the desert?

I know this is the female equivalent of an explosions-filled action adventure movie. But I also know that explosions-filled action adventure movies can totally bomb. This may be another milestone in the history of feminism: women can succeed as brilliantly as men. They can also fail as spectacularly as men.

Stock: Short

Call: Short

Put: Long

CX: Short

Update Thursday morning: SATC2 is down almost H$7 this morning. It may bounce back a buck or two by the time it halts (it's currently 7:45 AM Pacific), but that's a really bad sign. Maintaining all positions.

Update Monday night: I was right all the way around on this one. It cleared $37 million over the 4-day weekend, plus $14 million on Thursday. That's a solid $51 million, but the stock dropped from H$141 to H$95. Looks like the critics were right.

May 14, 2010: Just Wright the Letters to Juliet, Robin Hood

Now that summer is here, we have a good mix of movies, the occasional drama and romantic comedy competing for attention with the blockbusters. Plucky little things, those dramas and romcoms. And, of course, we have the inevitable blockbuster that isn't, where the second part of "blockbuster" is the more apropos word. We may have one of those this weekend.

First up is a romcom with Queen Latifah and a rapper named Common, Just Wright (JUSTW). I'm not clear on why you would call yourself something that literally describes you are lacking in any kind of unique quality, unless it's a play on words - it's very uncommon, I suppose, to call yourself Common. Regardless, I am, as you might have guessed, not all that familiar with Mr. Common's work. I am more familiar with Queen Latifah's work onscreen, and just loved her in Stranger Than Fiction. It doesn't hurt that that is one of my all-time favorite movies. The stock had a very nice rise for a few weeks, going pretty much straight up, but it has been dropping precipitously for the last week or so. It's at H$27, down from a high of H$37. Strike price is H$10, a good price. The call (JUSTCA) is down to H$1 or so, roughly in line with the stock. The put (JUSTPU) is at H$3, which seems on the pessimistic side. It's only going out on 1,800 screens, not a great release. Critics are not impressed, with only a 33% rating on rottetomatoes.com. It sounds utterly predictable and safe, which is both a good and a bad thing. But it doesn't sound terrible, which counts for something. I'm looking for the sweet spot, around $10 million, right between the call and put. There are fairly moderate expectations, which, hopefully, will not be hard to beat. But this bears careful watching. Note: For some reason, there is not a CX derivative. Not sure why.

Stock: Long

Call: Short

Put: Short

Next up, with better prospects, is Letters to Juliet (LJULT), looking like something between a romantic comedy and a romantic drama. Doesn't look funny, but doesn't look like a tearjerker, either. Looks quite inspiring, just maybe. It's an intriguing idea: a woman vacationing in Verona, Italy, where Romeo met Juliet, finds a letter from 1957. She eventually reunites two long-lost lovers. Very sweet. The stock has been rising steadily, even this week. It's currently at H$48, a high. Hmmm. Looks like we might have us a sleeper hit on our hands. It's going out on 2,800 screens, and it doesn't have a lot of competition right now. Strike price is H$20, which is way optimistic. Call (LJULCA) is, whaddya know, barely treading water. If this makes the strike price, we will know we have a sleeper hit. Put (LJULPU) is also predicting sub-$20 numbers, currently around H$3 and a half. The CX derivative is actually behind the stock, at about H$45, which is an interesting sign. Really suggesting a sleeper hit with this one. Critics are not enthusiastic about this one, either, possibly given that it looks completely predictable and safe. But it also looks great, and the idea of a romantic movie with an older woman at the center of it (Vanessa Redgrave) is kind of nice. And I just love the shot of her long-lost love showing up riding a horse. Completely cliched, but utterly charming for the right people.

Stock: Long

Call: Short

Put: Long

CX: Long

Finally we have the blockbuster wannabe that looks like it might very well be a bust, Robin Hood (RBNHD). Russell Crowe and Ridley Scott team up in a movie that just about screams "Gladiator in Sherwood Forest." Although there are also shots in the trailer of a bunch of ships landing on a beach, and being met with fierce resistance. Which also suggests "Saving Private Ryan in Sherwood Forest." Regardless, this looks like an action-adventure movie that happens to take place in medieval England and happens to feature one of the iconic guerrilla warriors of history. It looks quite serious, with many sobering scenes of old men passing down wisdom to young men, and the young men avenging the old men, with most of it shot in shades of grey, green, khaki and drab. With the occasional orange when there is firelight present. I am not optimistic, and neither, apparently, is anyone else - the stock is down to H$91, from a high of H$156. That's a catastrophic drop. Strike price is H$40, a once-reasonable target that is looking increasingly untenable. The call (RBNHCA) is still above the IPO, at H$3, but it's dropping, and I expect it to continue on that trajectory. The put (RBNHPU) is rising, as expected, aiming at H$4. The CX derivative is still at H$117, but it had farther to drop, coming from a high of H$168. It's going out on more than enough screens, but critics are not excited, with only a 44% rating on RT. And the positive reviews are middling in their praise, struggling to find some justification for approval. Harry Knowles, in a superb review, just shreds it, calling it a "colossal failure," and justifying that description with a highly detailed outline of the actual history involved, and why this movie should have nothing to do with that actual history - it should just be a movie about Robin Hood, the idea, the legend, the myth. We're looking at a bomb of possibly historic dimensions here.

Stock: Short

Call: Short

Put: Long

CX: Short

Update Friday morning: Robin of the Hood is doing well this morning, up H$4. This is not surprising, given the beating the stock has taken over the last month. Just Wright is looking a little more right, up H$1.50, while Letters to Juliet is down from its high, down a buck and change. All of this feels like noise. The buzz on Robin Hood is just relentlessly negative; even the positive reviews are just barely that. Iron Man presents a strong contrast because its very stylized, and just plain fun. Robin Hood looks way too serious for the mood of the audience right now. Expectations for Just Wright are fairly low, and I expect they will be beat without much trouble. The one I am most nervous about it Letters. It might open a shade below where it is now, but my opinion on that is not strong enough to switch positions. OTOH, I am expecting it to build. This movie looks like a long-term bet. Some people are going to hate it, but some people are going to be thrilled that there is something for them in the theaters. Maintaining all positions.

Well this was sort of an interesting weekend for TEQP-HSX. I got all the stocks wrong, but I got all of the options right, and one of the two CX derivatives right. I wasn't far off on the stocks - RBNHD adjusted up by a little more than H$5, JUSTW was down by a little less than H$3, and LJULT (the big loser) was down by H$6. So RBNHD and LJULT each reversed the trend that they were on, while JUSTW maintained the trend, but also went against the movement on Friday. The lesson for this week is pay close attention to trends, but be clear on how much weight to give to them. The trend with RBNHD was right, and the market was basically right. JUSTW did not have much potential, and it was fairly predictable. LJULT had been surging, but didn't have a lot of momentum. Not a great weekend, but not bad. I'm just glad I shorted RBNHD at H$107.

Holding all short to delist.

April 23, 1990: The Losers, The Backup Plan

Two moderately interesting movies this week, not great, but should be good. We're waiting for summer blockbuster season.

I haven't finished my new spreadsheet for evaluating opening weekend numbers, but I did come up with what I hope is a good insight. I noticed that there are a number of movies that peak on HSX (and Cantor) a few weeks before release, and then drop. Part of the reason for this, I suspect, is asymmetrical information. Those of us outside the studio know very little about the movie, and what we do know is mostly the result of marketing: who's in it, who are the key creatives, and what it's about. That's what the studio wants us to know. But the studio knows a lot more, specifically the most important piece of information about a particular movie that will determine its success: whether or not it's any good. I haven't developed this theory much beyond this, but I wanted to post about it today.

The first movie we have this weekend is The Backup Plan (PLANB), which actually has not peaked and then dropped. I suspect that because it's not subject to much hype. Jennifer Lopez, the star attraction here, doesn't have the luster that she used to. Stock is H$31, or about an $11 million opening, and has been moving steadily up. Strike price is H$10, a tad low, but not far off. Call (PLANCA) is doing quite well, at H$3 and change. Put (PLANPU), as expected, is dropping, just above a buck. CX derivative has followed just about the same trajectory as the stock, which is a good sign. Critics are not enthusiastic, with a 20% rating on rottentomatoes.com. There are only a few reviews up as of this writing, but I don't expect that to improve by much. It's going out on lots and lots and lots of screens. So what do we know about this movie? It stars Jennifer Lopez, who has some goodwill left over, but has also burned some of her star power. The guy is some handsome dude that I've never heard of. The plot is a variation on the romantic comedy. In these kinds of movies, there has to be a good reason why the couple is being kept apart. She's pregnant, the result of artificial insemination, but doesn't want to tell him. My guess is that this results in her coming up with all kinds of weird excuses for weird behavior. It's not hard to write these kinds of gags, and it's not hard to shoot them. Expectations are fairly minimal, but they should not be hard to overcome. Jennifer Lopez has one thing going for her: she is by far the most mainstream Hispanic actress in the country right now. That gives her a good marketing hook for a good segment of the population. The studio knows a lot more about how to market her than I do. But I suspect they will do that well.
Stock: Long
Call: Long
Put: Short
CX: Long

I'm more interested in the other movie opening this weekend, The Losers (LOSRS). The trailer looks like a lot of fun. This stock has followed the trajectory I outlined above, peaking and then dropping quite precipitously. It's currently at H$34, down from H$57. That's quite the cliff. Part of the hype is, I'm sure, due to the genre. Looks like a fairly generic action adventure movie, with a good B-list cast (although Zoe Saldana is close to being A-list) and lots of excuses for sex and explosions. Good times! Of course, it does star B-listers, most of whom are flying well under the paparazzi radar. Part of the problem for it this weekend will be competing with Kick-Ass, which also looks like a generic genre movie, but is quite the surprisingly good movie. That's going to steal a chunk of the audience. Strike price was set at H$20, which presumably made sense three or four weeks ago, but is close to ludicrous today. So, easy money playing the call and put this time around. Call (LOSRCA) is dropping like a rock, while the put (LOSRPU) is above H$4. CX derivative has also dropped off a cliff, but is still around H$40. Critics are almost kind, with a 50% approval on RT. Once again, low expectations, at least after too-high expectations were purged. I have to admit that I love the trailer, and I am somewhat optimistic about it just based on that. Of course, this is the asymmetrical information in its purest form: we're only seeing the cool shots. But I like how the trailer was put together, because it's not just a fast-paced smashup of lots of explosions. It's got a great mix of action, humor, and even some character development. I like trailers that take some time to show enough of a scene that you have to listen to get the joke. There are some good lines ("Blagyver!") and a few good shots. Love the guy who shoots people with his hands, and then they drop. Very simple, but cool. That suggests that it is well-produced, always a good sign Great production value there - simple, cheap, but cool. I also like the shot of Zoe Saldana opening up coffins. That makes we wonder how they ended up in those coffins. I am not all that much worried about how good the plot is. This is not a movie you watch for the plot, although it helps if it's not completely ludicrous.
Stock: Long
Call: Short
Put: Long
CX: Long

Ironically, I apparently don't have permission to embed the video for the trailer, so watch it at HSX.com if you're interested.

Update Saturday morning: I was traveling yesterday morning, so I missed LOSRS dropping H$4.50. Whoa, not a good sign. Guess that trailer isn't making up for the lack of stars.

Update Sunday night: The Losers unfortunately lived up to their name, not quite clearing $10 million, while J.Lo pretty much met expectations, opening at $12 million and change. I didn't predict the opening for the documentary Oceans, because it opened on Wednesday, and there isn't much data or experience to go on predicting opening weekend box office for documentaries. I probably should have shorted The Losers several weeks ago, then I would have felt comfortable staying short. My big mistake this weekend was staying long on an overpriced CX derivative on LOSRS. But a good weekend overall, as I got everything right about PLANB, and the options right on LOSRS. 6 out of 8, or 75%, ain't bad.

April 9, 2010: Date Night

Only one movie is opening this weekend, Date Night (DATEN), with Tina Fey and Steve Carrell. They play a married couple who go out on a date, escaping the kids. Something goes wrong with their reservation at the restaurant, so they pretend to be another couple. Said other couple apparently has trouble with certain elements of society who have nontraditional views on abiding by the laws and norms of society. So Tina Fey and Steve Carrell are suddenly on the run. I am a fan of both of them, and I am right in the target demographic, despite not being married with kids. Neither of them has scored big at the box office before, but they do, of course, have solid hits on TV.

The stock is at H$80, down today, and down from a high of H$99. The strike price is H$35, or a stock price of H$94. Call (DATECA) is right at the IPO, while the put (DATEPU) is at H$3 and change, and rising. The CX derivative is a bit higher, at H$93, but also falling. Reviews are mostly positive, but not wonderful, at 61% on RT. Shawn Levy, the director, previously made the Night at the Museum movies, as well as Cheaper by the Dozen and the Pink Panther remakes. Not an inspiring resume, but those movies have mostly made money. The fact that this is the only major release this weekend says that other studios decided to stay away from competing with this. One problem I expect this movie to have is that the real target demographic - young married couples with kids - tend to not see movies on opening weekends, specifically because, well, they're married with kids. But this could also speak to them. On the other hand, a $30 million weekend would be very good. I'm thinking somewhere between $25 and $30.

Stock: Long

Call: Short

Put: Short

CX: Short

Update Friday morning: The stock is down H$1 this morning, which is trivial. The call is barely above H$1, while the put is above H$4. Critics are still mildly in love, at 70% on RT, although most of the reviews are more excited about the stars than the material. I'm changing one position, and that is on the CX derivative. It's now at H$84, close enough to the price of the stock that it doesn't make much sense to try to split the difference.

I was slightly off, but not by much. DATEN cleared $27 million, right in the middle of my estimate. Of course, I drew a wide enough target - $25-30 million - that it's not a surprise that I got that right. My mistake was that the price of the stock on Friday morning - H$79 - was right at the high end of my estimate. Once again, I think I was letting my personal taste rule my decision a bit too much - I am a fan of both of these stars, and I want to see them do well. It has a 7.1 rating on IMDb, so I think the word of mouth will be positive. Staying long to delist.

March 19, 2010: The Bounty Hunter, Diary of a Wimpy Kid, and Repo Men

Three moderately interesting movies this week, about a bounty hunter with a special target, a wimpy kid, and some men repossessing unique property.

First up is The Bounty Hunter (BOUNT), Gerard playing the title character, who has to hunt down his ex-wife, played by Jennifer Aniston. That's an interesting premise. The trailer is funny, and it has a certain appeal. Stock is in the mid-50's, down from a high of H$65. Strike price is H$20, with the call (BOUNCA) at H$3 and a half. The put (BOUNPU) is below the IPO price, about a buck and a half, so those signals are in sync. The reviews, however, are utterly savage, with an 8% - and that's a weak 8% - approval on RT. I'm not sure what's up with Cantor this weekend, it looks like the practice site is no longer working. Which is a bummer, because I was having a very good time on it. C'est la vie. I'm not a fan of either Butler or Aniston, and neither of them impresses me in the trailer.

Stock: Short

Call: Short

Put: Long

Diary of a Wimpy Kid is based on the very popular books of the same name. I've never read them, but apparently kids eat them up. The stock (WIMPY) is at H$49, down H$3 this morning (Friday), never a good sign. Strike price is H$20, which seems reasonable, but the call (WIMPCA) is just above a buck, while the put (WIMPPU) is above H$3. Reviews are mixed, at 56% on RT. It's going out on 3,000 screens, a regular wide release. This is highly targeted, but narrowly targeted. Some kids movies are also appealing to adults - this doesn't sound like one of them.

Stock: Short

Call: Short

Put: Long

Repo Men is a futuristic thriller about men who repossess body parts, the way repo men today repossess cars. That's a disturbing idea. I was intrigued at first, but recently I learned that it was shot at least 2 years ago, so it's been sitting on the shelf. Never, ever a good sign. Stock (REPOS) is at H$31, down almost H$3 today, and down from a high of H$46. Strike price is H$15, but the call (REPOCA) is at all of 70 cents, while the put (REPOPU) is at almost H$4. It's at only 22% on RT. It's going out on 2,500 screens. Not a good sign in the bunch.

Stock: Short

Call: Short

Put: Long

Update Sunday night: This was one of those weeks when the market got a couple of things almost exactly right, so there wasn't a lot of excitement. WIMPY and BOUNT both came in at $21 million, WIMPY ahead by a few hundred thousand. Jennifer Aniston, her hair, and Gerard Butler and his chest adjusted down less than 50 cents. That's technically a win for me on the stock, but it's meaningless. It just means I don't have to worry about shorting it tonight in anticipation of the drop tomorrow morning. WIMPY adjusted up about H$8, slightly better, but not by much. It's got an A- rating on Yahoo! Movies, which is not bad. That score always has to be taken with a large grain of salt, but it's not a bad sign. So I'm going to go long to delist. REPOS was, in fact, a total bomb, only clearing $6 million. And to think I was once optimistic about that one. Good thing I caught it in time.

My record this week is 6 for 9, all three calls, the stock for BOUNT and REPOS, and the put for REPOS. Not a bad week for me, but also not a great week for movies. I have no plans to see any of these, and I think they will be forgotten in a year.

Note about The Ghostwriter. Roman Polanski's latest opened wide this weekend, which I didn't realize, and I forgot to include that in my post. Sorry, Mr. Polanski! I'll be sure to pay better attention next time. For the record, it had a good weekend, but only adjusted up 20 cents.

January 29, 2010: Edge of Darkness, When in Rome

We only have two movies opening this weekend, and we are still in January.

When in Rome (WROME) is a cheesy romantic comedy starring Kristen Bell and Josh Duhamel, who I could not pick out of a crowd. She goes to Rome, and picks up some coins from a fountain of love. The men who threw the coins in the fountain fall in love with her, and follow her home. Sounds like it could be funny. Stock is not doing all that well; it's at H$27, down from a high of H$42, following the classic HSX profile of topping out just before the release. The strike price is rather unfortunately set at H$15, which is now absurd. The call (WROMCA) is sinking, as it should. The put (WROMPU) is doing quite well. The CX derivative on HSX is, of course, above the stock price, and dropping. On Cantor, it's above $30, just barely, but I suspect that won't last. The reviews are devastating, with only 6% on RT. It's going out on 2,400 screens, which sounds like it may be about 2,200 too many. Not hard to call this one.

Stock: Short

Call: Short

Put: Long

CX on HSX: Long

Cantor: Short

Mel Gibson is back in front of the screen in Edge of Darkness (EDRKN). It's a revenge movie, about a guy who is seeking vengeance for the murder of his daughter. It worked last year for Liam Neeson. Stock is at H$55, down from H$61. Not a bad drop, but I did see it drop H$10 earlier this week. Strike price is H$2o, right on target. Call (EDRKCA) is middling, just above the IPO price. The put (EDRKPU) is about the same place, a smidgen better. CX on HSX is at H$53, very closely following the stock. Same with Cantor. It's going out on 3,000 screens. Critics are generally positive, although far from effusive, with 60% liking it. It's an excuse for Mel Gibson to kick butt, but that sounds like a good thing. With all the signs this close to one prediction, I am going to go for the sweet spot, right at $20 million.

Stock: Long

Call: Short

Put: Short

CX on HSX: Long

Cantor: Short (where I had it originally)

Well, I came very close on both of these, but I technically got the stocks wrong on each. WROME cleared $12 million and adjusted up, but just a bit, from H$30 to H$32. EDRKN dropped, from H$53 to H$46, as it cleared $17 million. I was right about both of the calls, and right about the put for WROME. I was wrong about the put for EDRKN, but not by much. I was right about both of the Cantor predictions, which feels good. Mostly a positive weekend.

January 8, 2010

Happy New Year! We're in the middle of Oscar season, which means good movies. But we're also in the early part of January, which usually means bad movies. Studios tend to release clunkers in January, because there are so many big movies left over from the holiday season. So having a release date in January is not a good sign for a movie. OTOH, it's possible that some studios are reversing this trend, because they know that the other studios are releasing dreck, so they competition is weak in that sense.



One possibly good movie is Leap Year (LEPYR), the usually wonderful Amy Adams in a romantic comedy. I buy her as a romantic lead. I'm not sure why a movie called "Leap Year" is being released two years before a Leap Year, but maybe they wanted to make it ASAP. The stock has been rocketing up lately, presumably after an actual release date was announced. It's up slightly today to H$32, near a high. Strike price is H$10, which makes perfect sense. The call (LEPYCA, one of the first of the new six-letter options) is treading water, but just barely. The put (LEPYPU) is marginally higher. On Cantor, the stock is up $3 today. However, the critics are savaging it, with only 18% approval on rottentomatoes.com. The expectations are quite low, so I am going to go long.
Stock: Long
Call: Long
Put: Short
Cantor: Long

Moving away from the cheesy romcom to the cheesy horror thriller, we have Ethan Hawke in Daybreakers (DAYBR). Again, lots of movement upwards, with a recent dip. A little more serious drop, from H$49 to H$39. Call (DAYBCA) is up to H$3, against a strike price of H$15. Put (DAYBPU) is above the IPO, but not much, so there are mostly good signs from the derivatives. CX on HSX is at H$46, down of late. It's marginally higher on Cantor, but about the same as the CX. Interestingly, it's doing well among critics, at 65% on RT. Vampires rock these days.
Stock: Long
Call: Long
Put: Short
CX on HSX: Long
Cantor: Long

Michael Cera, who is, oddly enough, becoming a movie star, stars in Youth In Revolt (YRVLT) as a both a young geek and his alter ego. If anyone can pull this off, I'll bet he can. Stock has been rocketing up, but is down today, to H$24, from H$27. This is for anyone who needs a coming of age story. Strike price is relatively optimistically set at H$10, with the call (YRVLCA) right back at the IPO price. Put (YRVLPU) is, what do you know, above the IPO, at two bucks and change. This has to be a good movie to actually make money. Fortunately, it looks like it might actually be quite funny; critics are liking it, with 68% approval on RT. My guess is that the studio knows it has a good movie, and is willing to let it build by word of mouth, and that it will take off as the holiday movies fade. The CX derivative is on basically the same tragectory as the stock. On Cantor, it's been really high, and is sinking from the ridiculous price of $45 or so. But it's now down to $29, so it might be time to reverse my short.
Stock: Long
Call: Long
Put: Short
CX on HSX: Long
Cantor: Long

I was a shade too optimistic, but not by much. Daybreakers came in almost right on the nose of both the strike price and the stock price, right at $15.0 million. The stock adjusted from H$40.61 to H$40.50, down a grand total of 11 cents. Let's pat ourselves on the back, traders! Leap Year came in at just over $9 million, adjusting down H$4 1/2. Youth in Revolt performed as we expect an indie coming of age comedy to, at $7 million, down H$2. I got a couple of puts right, and most other predictions wrong, but not by much. Pretty much a wash. We'll be back next week.

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.

December 18, 2009: Did You Hear About Avatar?

There are only two movies out in wide release this weekend, but one is one of the most highly anticipated movies of this, or the last several, years.

But first, the sacrificial lamb. That would be "Did You Hear About the Morgans?" (MRGNS), starring Hugh Grant and Sarah Jessica Parker. I like Hugh Grant, I think he was great in Notting Hill. I'm not such a fan of SJP, but I can see the two of them as a couple in New York. Makes sense to me. The problem I have with them right now is that the stock is tanking big time. Just dropping like a rock. It's going out on 2,700 screens, which is a good wide release. But it's at only 10% on rottentomatoes.com. I have a strong feeling it's being released against Avatar for a couple of reasons. One, no other studio wanted to release a movie this weekend. Two, the studio probably assumes it's not going to great business anyways, so why even try? Three, it will be easy to blame the lack of box office on the competition. The strike price is H$20, which is absurd for a stock barely breaking H$30. The call (MRGCA) is dropping almost as fast as the stock, while the put (MRGPU) is heading skyward, about H$4 and a half. The CX derivative on HSX is still above H$40, wonder of wonders, but we can probably assume that won't last long. It's also dropping on Cantor, although it's still in the mid-30's. I like the trailer, but I have a feeling that all the good jokes are in those 2 1/2 minutes.

Stock: Short

Call: Short

Put: Long

CX on HSX: Short

Cantor: Short

Now, of course, we come to the big box office draw this weekend, a little movie called Avatar (AVATR), by some guy named James Cameron, who is one of the most successful directors of all time. The expectations are through the roof, and the backlash is almost as intense, even before the movie is released. Several people have pointed out that similar predictions of doom accompanied Titanic. The stock has been floating above H$200 for a few weeks now. Strike price is H$65, which correlates to a stock price of H$175. Call (AVACA) is, appropriately, through the roof. Put is in the nether regions. It's going out on a bazillion screens. Critics are loving it, and falling all over themselves to praise it. It's at 82% on RT. Strike price for the Holiday Warrant is H$200, and that's looking absurdly low. CX on HSX is at H$277, which is way high. The Cantor derivative has been floating between $220 and $250. There are various Nominoptions. Go long on most of those.

Stock: Long

Call: Long

Put: Short

Holiday Warrant: Long

CX on HSX: Long

Holiday Warrant: Long

Cantor: Long

Update Friday morning: Avatar is up H$9, and MRGNS is down almost H$3, so it looks like people are buying the hype about Avatar. James Cameron does have a rather spectacular track record. Morgans looks like a bunch of jokes in search of a plot. I have a feeling that is going to turn off most demographics. East Coast elites will get some of it, but they might also not appreciate being made fun of. Meanwhile, people in the heartland might be offended by the stereotypes of down-home folks with guns. I'm also not sure how it resolves. Are they going to fall back in love? So keep the short on that one.

Update Sunday night: Avatar didn't quite storm the gates as expected, but it still did $73 million, and apparently there was a major storm on the East Coast that thwarted some moviegoing. I'm still long to delist. Morgans, OTOH, was, in fact, a bomb, and presumably will be forgotten in a few weeks. I got everything right about MRGNS, while the only thing I got clearly wrong about AVATR was the stock. It dropped H$19, but that's just 10%, and I think it will make it up. CX on HSX is still a little high, but it's impossible to tell whether or not I was right about anything of the derivatives besides the put and call. Both of which I got right. So it was a good weekend.

October 9, 2009: Couples Retreat

There is only one movie opening wide this weekend, and I have no idea why it has no competition, because if I were a studio execuctive, I would sure as heck counterprogram against this. It's "Couples Retreat," (CPLRT), starring Vince Vaughn, a couple of his buddies, and some cute women who look good in bikinis. I do not understand the appeal of this movie, and I understand the price of the stock even less. It's been floating above H$80 for a couple of weeks. That's a $30 million opening weekend. I just don't buy that. The price has been dropping; it's at H$75, down from H$86. The strike price is right on the money, at least given the recent price of the stock, at H$30. The call (CPLCA) is at H$2 and change, although it is dropping. Makes sense given the stock price, but I have no idea why anyone would go long on the call. This does not look like a $35 million movie. The put (CPLPU) is rising, coming close to H$3, which makes more sense.

I just don't sense anything original about this movie. It looks like a frat boy comedy for adults. Which strikes me as a contradiction. It's opening on 3,000 screens - not surprising, particularly given the lack of competition. Boxofficemojo.com's Derby predicts $26 million, and I think that's a little high. It's at 8% on rottentomatoes.com, so apparently critics agree with me.
Stock: Short
Call: Short
Put: Long

'Couples Retreat' Theatrical Trailer @ Yahoo! Video

Update Monday morning: OK, I found out why there was no counterprogramming against this movie: it was much more popular than I was expecting. I mentioned this to a friend, with a perplexed expression on my face, and he had a two-word answer: "date movie." Which suddenly explained it: couples could go see this. The men were attracted by the women in bikinis, and the women were attracted by the idea of going to see a movie about relationships. So it opened with more than $35 million, and adjusted up. Weekly opportunities for more humility, that's what HSX offers.

I did learn something very interesting this weekend: the price of this movie on cantorexchange.com was very different than it was on HSX. It halted at H$69 on HSX on Friday, but it was trading about 20 points higher, in the high 80's, on Cantor Exchange. I shorted it on Cantor, thinking that I was taking advantage of a great opportunity for arbitrage. But the price on Cantor, even though it was much more thinly traded, was actually much more accurate. I guess people playing with semi-real money do better research, and have a better idea of what they are doing, than people playing a game. At least that was the case this weekend.

October 2, 2009: The Invention of Lying, Whip It, Zombieland

We have three comedies this weekend, three rather different comedies, and not a family film among them.

First up is The Invention of Lying (INVLY), in which Ricky Gervais plays a man who lives in a world where everyone always tells the truth. He, however, learns how to lie, which makes his life quite interesting. I like Gervais, and I like Jennifer Garner, the romantic object of his affection, but boy is this stock not doing well. It's down from a high of H$48 to H$29 today. HSX set the strike price at H$15, which was reasonable a couple of weeks ago. Now it's just depressing. But this is also a great opportunity to make some easy money off the options. The call (ILYCA) is below a buck, and down it will continue to go - the stock is predicting somewhere around $10 million this weekend, nowhere near $15 million. The put (ILYPU) is at H$3, and even that might be cheap. It's going out on 1,700 screens, which is not bad, but not a very wide release. That means the studio doesn't have blowout expectations. Critics like it; it's at 61% on rottentomatoes.com. I have a feeling the stock drop was the result of serious overhyping. This price feels much more realistic. What I like about it is that it's a very original idea. One problem I have is that it feels very much like our world, except that everybody always tells the truth. But if it was always that way, everyone would have adapted appropriately, and a large part of the comedy seems to come from Gervais' character surprise at some of the truths that he is being told. I am cautiously optimistic that it will be a pleasant surprise on the upside. But even at $10-12 million, the strike price is still ridiculous.

Stock: Long

Call: Short

Put: Long

'Invention of Lying' Theatrical Trailer @ Yahoo! Video

Drew Barrymore is putting all of her Hollywood experience to use in her directing debut, "Whip It" (WHIPT), about a teenage girl who joins a roller derby team. She's also co-starring, which is gutsy, but possibly a smart move. Stock price climbed quite nicely for a while, dropped for a few days, but is picking up today. High was H$34, and it's currently H$26. So not a terrible drop. It feels like a somewhat generic "rebellious-teenager-coming-of-age" movie, but every generation needs movies like this, and Drew Barrymore directing certainly fits well with the message. Of course, it might look generic to me because it doesn't really resonate with me. It's fairly narrowly targeted, but it's also very precisely targeted, and I ain't in this demographic. Strike price is a little more reasonably priced at H$10. Even so, the call (WHPCA) is sinking, down to H$1.35, while the put (WHPPU) is rising, within range of two and a half bucks. We have a disconnect here between the put and the stock price. The put suggests an opening of around $7.5 million, while the stock suggests an opening closer to $10 million. It's going out on 2,100 screens, a good release for a movie that is somewhere between a good indie and a studio movie. It's being released by Fox Searchlight, so this makes sense. It's at 80% on rottentomatoes.com, so it's probably actually a good movie. Drew Barrymore could have chosen just about any script for her directing debut. The fact that she chose this one is a healthy sign.

Stock: Long

Call: Long

Put: Short

'Whip It' Theatrical Trailer @ Yahoo! Video

Now we come to the movie with the big guns this weekend, and I do mean big guns. Zombieland (ZMBLN) is about zombies taking over the world, and the few remaining normal people who have to somehow survive. Not the most original plot, but the buzz is great, and the stock is doing quite well. It's currently at H$59, just barely down from a high of H$62. The strike price is H$20, which, in contrast to INVLY, feels rather on the low side. Call (ZMBCA) is solidly above H$3, while the put (ZMBPU) has floated down to the IPO price, H$2. I'm surprised the put is that high, but apparently some people don't like zombies. It's going out on 2,900 screens, a good wide release. Critics are enthusiastic, with an 84% rating on RT. It's an R-rated comedy, but so is The Hangover, and that made $45 million on its opening weekend, on the way to a worldwide gross of 10 times that. The stock and call are predicting $22-$24 million, but I think $30 million is not out of the question.

Stock: Long

Call: Long

Put: Short

'Zombieland' Theatrical Trailer @ Yahoo! Video

Well this is a little embarrassing. I was right about Zombieland, if a shade optimstic; it grossed $25 million and adjusted up H$11, to H$67. On INVLY and WHIPT, however, I was totally off. Each adjusted down, although INVLY by H$4. It grossed $7.3 million. Drew Barrymore apparently does not have the star power I thot she did; WHIPT only picked up $4.8 million. Both were cheap productions, but both of those are disappointments.

I did learn a couple of valuable lessons this week. First, I checked out The Derby at boxofficemojo.com, to see what the predictions were there. I've played The Derby once or twice, but I haven't been that impressed with the box office predictions there in the past. But it would have been a good reality check this time around. The prediction for Zombieland was way off, at $16 million, but the prediction for Invention of Lying was almost perfect, and the number for Whip It, $8.9, was off, but still closer than what I was thinking. So I will have to check that on a routine basis.

The second, even more important lesson that I learned this week, was that I have a tendency to stick with whatever position I am holding, particularly if I am long a stock. I want to prove that I have been right all along. I didn't short INVLY when I should have, which was a couple of weeks ago. I also should have shorted WHIPT back then. I will have to be more aggressive about changing positions well ahead of opening weekend.

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.

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!

HSX: Week of August 7, 2009

This is my second post on this blog! We have more interesting movies, both artistically and in terms of box office, this weekend. I have now added trailers!

Let's get the cheesy horror movie out of the way first. This week it's called "A Perfect Getaway (PGETA)," and features beautiful scenery as well as beautiful people - it's set in Hawaii. It's a decent B or C list cast (Milla Jovovich, Steve Zahn). Could be fun. I have no idea, since I don't watch these kinds of movies. The stock is right near the high after moving up quite well over the last couple of months. It's still only at H$22.75. Boxofficemojo.com is estimating the theater counts at about 2,000 (precise counts are updated Thursday afternoons), which sounds right. It's at 50% on rottentomatoes.com, with only 10 reviews. The critics are saying what I expected; it's OK, don't expect much and you won't be surprised. Strike price is H$10. That feels a little on the high side, but $5 would have been laughably low, so that works. With the stock predicting about an opening weekend of around $8 million, the options are not hard to figure out. The call, of course, is down to about H$1 (PGECA), while the put is at almost H$3 (PGEPU). I don't think this will bomb, but I would be surprised if it sees box office above $9 million.

Stock: Long

Call: Short

Put: Long

'Perfect Getaway' Theatrical Trailer @ Yahoo! Video

We also have another blockbuster wannabe, General Infantry Joseph, or G.I. Joe (GIJOE), as is his nom de plaything. This certainly looks like fun. I have to admit that I have watched the trailer several times. It's efficient, well-edited, and strongly suggests that the action is very well photographed, with lots of great slo-mo scenes. Looks great! Doesn't sound so wonderful - this may be one of the few trailers in which the dialogue consists almost entirely of action-adventure cliches:

"The mission is a go!"

"I want in."

"A team is being assembled."

"I want the warheads ready to launch in one hour."

"This has just begun."

Dennis Quaid plays General Hawk. Of course he plays "General Hawk." He's not going to be playing "Colonel Pigeon." Channing Tatum is also in it, apparently playing Mr. Joe himself. The stock has been extremely volatile, crashing badly in the last couple of months, although it has regained some momentum of late. It's at H$144, which predicts an opening weekend of about $53. HSX positioned the strike price a little better than it did for PGETA. The options, interestingly, are almost exactly mirror opposites of each other, which is highly unusual. The call (GIJCA) is above H$4, as is the put (GIJPU). Critics are taking it for what it's worth - eye candy, with enough substance and plot not to insult the intelligence of the average teenager. It's at 75% on rottentomatoes, with 16 critics. I've heard rumors that it isn't been screened for critics, which would not be a great sign, but it looks like there are some who got to see it somehow. Critics aren't really going to matter much. The LA Times pointed out that Paramount is marketing this very heavily to "middle America," i.e. guys in the heartland who watch NASCAR. It's a patriotic thing. I'm going to assume that they know what they're doing. It's going out on oodles of screens, roughly 3,500. It feels odd to write this, but a $50 million opening weekend is almost diminished expectations. It's certainly nothing like what Transformers 2 did. The gadgets look cool, the men are buff, the women are hot, and the good guys win. What more do you need?

Stock: Long

Call: Long

Put: Short

Note: I reversed positions on Friday morning, so my positions are now this:
Stock: Short
Call: Short
Put: Long

G.I. JOE trailer in HD

And now we come to art. Finally, a movie about a women who is a spy! Well, Julia Child was a spy (she worked in the Office of Strategic Services, predecessor of the CIA, in WWII), but she was, of course, famous as the woman who introduced America to French cuisine. Like they say, it's a dirty job, but somebody's got to do it . . .

Julie and Julia (JULIE) is one of the best examples of counterprogramming in a long time. Talk about a chick flick. It stars the queen of modern cinema, Meryl Streep, and one of the up-and-coming princesses, Amy Adams. The one problem is that it is directed by Nora Ephron, who is one of my least-favorite directors, in part because I think she completely botched Bewitched. Nicole Kidman as a silly wimp? That was just so wrong. Well, here's hoping she gets this one right. The stock has been on a tear, and today is at H$56, just down from its high. Teenage boys won't be interested in this, but women of a certain age certainly will. Options are nicely positioned, with a strike price of H$20. The call (JULCA) is doing well at $H2.52 and a half, but that's down almost H$1. So some optimism has faded a bit. The put (JULPU) is above H$3, so that H$20 strike price is looking endangered. Critics are moderately excited, with 64% giving it a fresh rating,l although none are wildly enthusiastic. I'm expecting a solid, comfortable movie, and that's what the critics are telling me. It will probably be on about 2,500 screens, easily enough for the non-G.I. Joe fans to see it any time they want.

Easily the best thing about this movie is that the marketing is a no-brainer. Dozens of action-adventure and horror movies are out there in the culture, with more and more being released every month. But there is and will be only one movie about a woman cooking every one of Julia Child's 524 recipes, and that movie stars Meryl Streep, Stanley Tucci, and Amy Adams. Even if I think Nora Ephron could use some help in the movie-magic department, her heart's in the right place. Sometimes passion makes up for skill. Julia Child is a little like Walter Cronkite and, in a weird way, Michael Jackson - a creature of television, fortunate enough to come along when it was still possible to be on TV and be one of a kind. She was 6' 2". She towered over most men. I don't think she'll tower over the men this weekend, but I expect some pleasant surprises. $25 million might be a bit much, but $22-23 sounds right.

Stock: Long

Call: Long

Put: Short

'Julie and Julia' Theatrical Trailer @ Yahoo! Video

Update Friday morning: All three are down today, and they are down by enough to make me question my optimism. I am reversing position on G.I. Joe: The Rise of Cobra, because I don't think Cobra is going to rise all that well. The reviews are trickling in, despite the movie not being screened for critics, and they are pretty bad. To make its numbers, this movie would have to expand beyond the teenage boy fanbase, and I'm not sure it's going to do that.

However, I am staying long on the other two. I still think Julie and Julia is a unique cinematic proposition, and Perfect Getaway doesn't have a lot of room to sink. There's not a lot of downside potential, just because the stock is already fairly low, but there is still some upside potential. If it turns out to be a good opening weekend, the stock might adjust upwards nicely, but it probably won't adjust downwards all that much if it sinks. So there is more potential for losses shorting it.

Update Sunday night: Looks like my first instinct on GIJOE was the right one: It opened with $56 million, which means I would have done well with my original predictions. Lesson of the day is do not reverse positions unless the signal is really, really strong on Friday morning. I did, however, get JULIE right; it came in at $20.1 million, almost exactly the strike. I could have made more money if I had shorted the call on JULIE, but my rule is that I count it as correct if the position is right, even if the amount is off. PGETA didn't even meet its very low expectations, but I got the options right. So I got 5 out of 9 this weekend, but I missed the big one, which was GIJOE.