January 15, 2010: Book of Eli, Spy Next Door, Lovely Bones

The three movies this week are, hopefully, a bit better than the standard January fare. At least two of them look that way.

First up is Denzel Washington wandering a post-apocalypse wasteland in Book of Eli (BOELI). He's apparently trying to save the world by carrying a Bible somewhere. However, the trailer is mostly just him kicking ass in earth tones. Stock is at H$80, down from a high of H$97. This one has not suffered from lack of hype. The strike price is H$30, and the call (BOELCA) is at H$3 and some, but that's down for the day. The put (BOELPU) is above H$2, and also down today, but not by much. An H$30 strike price translates to H$81, almost exactly where it is right now. So the call is probably too optimistic, with a prediction of a stock price of H$90. The Cantor option on HSX is at H$89, but it has been extremely volatile, and that's also down from a high of H$97. It's going out on over 3,000 screens, which is good. But the reviews are not good, at only 44% on RT. I think Avatar will still be sucking up some action movie oxygen. On Cantor Exchange, it's at $86, down from a high of well over $100. None of the signs are good.

Stock: Short

Call: Short

Put: Long

CX on HSX: Short

Cantor: Short

Jackie Chan is back in action in The Spy Next Door (SPYND). I'm sure it's a standard Jackie Chan movie, but with little kids. You know what you get with Jackie, and it's usually at least OK. He's not a young man anymore, but he still brings it. Stock is at H$31, down from a high of H$35. Strike price is H$15, which may have made sense a while ago, but doesn't now. Call (SPYNCA) is right at the IPO price. Put (SPYNPU) is above IPO, which makes sense. It's going out on almost 3,000 screens, but the reviews are atrocious, at only 7% on RT. Boy, that's horrible. The CX option on HSX and the option on Cantor Exchange are both in the mid-30's. Reviews that savage mean that, quite simply, it sucks. Even little kids occasionally have good taste.

Stock: Short

Call: Short

Put: Long

CX on HSX: Short

Cantor: Short

Finally we have the most interesting - at least in terms of the backstory - movie coming out this weekend, The Lovely Bones (LVBON). Peter Jackson, he of LOTR fame, is trying his hand at serious drama. Based on a best-selling book by Alice Sebold, it tells the story of a 14-year old girl who is murdered, but doesn't quite make it to heaven. It's been in limited release for a month, and reviews have not been kind. The stock is at H$27, down from a high of H$60. Quite the drop. There are no options, since it's been out for several weeks. It's at 35% on RT, and many of the reviews are brutal. It's expanding from 57 screens to over 2,500. The CX derivative on HSX is still at H$40, but has dropped precipitously. On Cantor, it's in the mid-30s'. The book sold 15 million copies, so I think there is an audience for the movie still out there, even if it's not very good. The expectations are so low at this point that I think they will be easily beaten.

Stock: Long

CX on HSX: Short

Cantor: Long

Update Friday morning: Book of Eli is down a bit, not much, so my prediction looks good. Same with Spy Next Door and Lovely Bones. Jackie Chan's latest is down H$1.25. Not much, but it confirms the trend. Lovely Bones is up H$3.75, also confirming my suspicions that it will bounce back from terrible early reviews. Maintaining all positions.

A fairly good weekend for me, and mostly in line with expectations. I was off on BOELI, but not by much - it made $38 million, but the multiplier was 2.2, because of the holiday weekend, which I didn't take into account. It adjusted up H$3. SPYND brought in $13 million, so I was right about that one. Lovely Bones did much better than expected, with a take of $20 million. It adjusted way up, from H$31 to H$45. So I basically got two out of three right.

November 6, 2009: The Fourth Kind of Men Stare at Christmas Carols and Goats

We're back to a normal release schedule this week. We're also at the beginning of the holiday season, which means three things: blockbusters, Oscar-bait movies, and Holiday Warrants on HSX.

First up this week is "The Fourth Kind," (4KIND) about alien abductions. Looks good, could be interesting. Stock has been rocketing up, but is down H$3 today to H$30. Call (4KICA) is doing well against a H$10 strike price, although the put (4KIPU) is also doing reasonably well. It's going out on 2,450 screens, not a bad release. Critics are not impressed. I don't think there's a lot of room on the upside, but there's not much danger on the downside. Go with the flow.
Stock: Long
Call: Long
Put: Short

'Fourth Kind' Theatrical Trailer @ Yahoo! Video

Cameron Diaz stares in a thrilled called "The Box," (THBOX) about a box that does strange things. The stock is tanking. I like Cameron Diaz, but not enough to see her in a cheesy movie about some bizarre piece of squareness. The call (BOXCA) is optimistically above the IPO price, but the strike price is H$10, so the call, at H$2 and change, predicts an opening weekend around $12 million, while the stock, at H$21, is suggesting something more along the lines of $7-$8 million. The put (BOXPU) is more sensibly also above H$2. Critics are mixed, with 54% on rottentomatoes.com. I shorted this on CantorExchange.com several weeks ago. Guess what I suggest you do today.
Stock: Short
Call: Short
Put: Long

<br/><a href="http://video.msn.com/video.aspx?mkt=en-US&amp;vid=89c3732c-0168-404b-9c98-a6bc6dc0a5e8" target="_new" title="&#39;The Box&#39; Trailer">Video: &#39;The Box&#39; Trailer</a>

Easily the biggest release this weekend, and one of the biggest of the year, is A Christmas Carol (CAROL), a Walt Disney production of a Robert Zemeckis film, starring Jim Carrey. Oh, and by the way, it's by the classic by some guy named Charles Dickens. I like Robert Zemeckis, I think he's made some great movies, but I also think he is getting carried away with the technology on this one. The trailer looks amazing, with a motion-captured Carrey flying around London. Looks amazing, feels cold. Doesn't feel charming, which is supposed to be the point of the story. Stock is up today, but has been sinking of late. I expect that trend to continue. The call (ACCCA) is close to H$3, but has been dropping. It's against a H$45 strike price. I think $30 is more reasonable. The put (ACCPU), meanwhile, is rising. Critics are sort of in favor of it, with a barely fresh (61%) rating on RT. I short this on Cantor, too. It's going out on a bazillion screens, but I don't feel the love.
Stock: Short
Call: Short
Put: Long

'Christmas Carol' Teaser Trailer @ Yahoo! Video

In a great counterprogramming move, we have The Men Who Stare At Goats (MGOAT), about a US Army program to train psychic spies. Supposedly it's based on a true story. I am very much looking forward to this. Not sure how many people are, because it's really not a conventional movie. But boy do we need that in this movie season. Stock is down slightly, but has been rising steadily, and is in the mid-H$30's. The call (MGOCA) is a shade optimistically trading around H$3, against a H$15 strike price. That's possible, if a little unlikely. Given the uncertainty of this movie, considering it fits in the oddball-black-comedy genre, the put (MGOPU) is also flying high, around H$2 and change. It's going out on 2,200 screens, a good release for a movie like this. Critics are, again, just barely feeling the love - it's just barely fresh, at 60% on RT. Sounds like it's not as great as it could be, but still entertaining. This is one time I am going with my sense of taste and hunger for a smart, funny movie.
Stock: Long
Call: Long
Put: Long

'Men Who Stare at Goats' Theatrical Trailer @ Yahoo! Video

It was a good weekend here at TEQP.HSX - I called just about everything right. The only stock to come in above the strike price was 4KIND, which bagged $12 million. THBOX actually adjusted up, but it was so far down it didn't have much room to go down. I got the options right there. I got the stock wrong, but it only adjusted up by H$2, so it was basically a wash. MGOAT also adjust up, again just barely, by H$3. It missed the strike price, but not by much. I clearly made a mistake with my prediction for the put, because the call and put can't both be long. But I am going to go with my mistake. So I got the call wrong, and the put right. I nailed CAROL, within $1 million. I also nailed THBOX, even more precisely, but the margin of error is much greater with a stock like CAROL. I just don't think audiences are ready for a Christmas movie this far in advance of the holiday itself. Most people aren't even thinking of Thanksgiving yet! So I got 10 out of 12 right, and on the most important one, I bet against the market, and scored big. Like I said, a good weekend.

October 23, 2009: Astro Boy, Amelia, Saw 6, and Cirque du Freak

A nice broad range of movies this weekend, although nothing I am all that excited about for myself.

First up is Astro Boy, (ASBOY) based on a Japanese cartoon. I know next to nothing about this cartoon. I'd never heard about it before. I haven't seen any marketing besides the trailer, but since I am several steps removed from the target demo, that is not surprising. What I do know is that the stock is tanking. It reached a high of H$57 earlier this year, was at H$57 earlier this month, and is currently down to H$32. That's a precipitous drop. So this boy can fly - and that's special because . . . ? I also just noticed that the IPO date was Oct. 11, 1999. So this stock has been around for ten years. Talk about development hell. Strike price is H$15, very high for this stock price. Call (ASBCA) is at H$2.65 and dropping, while the put (ASBPU) is going the opposite direction, and is at H$2.52 . It's going out of 3,000 screens, but I don't think that's going to do much good. It's well with critics, with a 70% rating on rottentomatoes.com, so that is something to consider. So it might surprise on the upside, but I doubt it. It is trading very differently on cantorexchange.com, and that is a strong counterindicator. But I would be surprised if it does more than $12 million.

Stock: Short

Call: Short

Put: Long

'Astro Boy' Trailer

Cirque du Freak is another movie based on a popular children's movie, and, like Astro Boy, I've never heard of it. Also like Astro Boy, the stock (VAMPA) is tanking, down from a recent high of H$41 to H$22. The strike price is H$10, which is a little more reasonable, and the call (VAMCA) is trading high, almost at H$3. The put (VAMPU), however is also above H$2, although only about a quarter above. It's going out on 2,700+ screens, but the critics are savaging it, with only 25% on RT. It's marginally higher on Cantor, but only about $30. That sounds realistic. Vampire fans have lots of material to choose from these days. I think $9-10 million is about right.

Stock: Long, but only because it's down so far already

Call: Short

Put: Short

Saw 6 (SAW6) is the latest entry in this particular horror franchise. Every other studio must have a lot of respect for Lionsgate, because most of them released their other horror movies well before this one. Stock is at H$71, near its high. Strike price is at H$30, which is about right for this franchise - that's where several of the last of these movies have debuted. But the call (SA6CA) is above H$3. That doesn't sound right, because franchises like this eventually wear out their welcome. The put (SA6PU) is also going up, aiming at H$3. I'm sure it's going out on lots of screens. Yep, 3,000+. But it also has competition; Paranormal Activity is still at the beginning of its hot streak, and that could take lots of business from this movie. I have no idea what critics think of it, because there are no reviews on RT. That would be because it hasn't been screened for critics. Never a good sign, although it probably doesn't matter much this time around. This is a twist: the price on Cantor is way below the price on HSX. That's different. It's around $60 on Cantor. So HSX is predicting $26 million, Cantor around $22 million. I'm thinking somewhere around $22-25 million.

Stock: Short

Call: Short

Put: Long

To round out the weekend, there's the heartwarming tale of Amelia Earhart, "Amelia" (AMELA). The stock is tanking, it's down to H$18, from a high of $42, and the critics are not impressed (30% on RT). Strike price is H$10, with the call (AMECA) barely over a buck, and the put (AMEPU) is soaring, like the legendary aviator herself. It's only going out on 800 screens. It's at roughly the same price on Cantor, in the low $20's. But I think all those signs are wrong. This is one time I am betting strongly against the market. This is the second biopic of a famous 20th century woman, played by a multiple-Oscar winning actress, this year. The other was Meryl Streep in Julia & Julia. That was a solid movie, although I didn't care for the part with Julie Powell; I though it was very badly written. That did quite well, and it may be a better movie than this one. But for all her charm and sense of adventure, Julia Child was still playing around in the kitchen. Amelia Earhart took risks that no other woman had ever taken. In terms of an inspiring story, she has few equals. I think Hillary Swank is perfectly cast. There are people out there who will see this movie, and not another movie for months. It doesn't really matter how good it is; it just has to be decent. It may very well be a maudlin tearjerker. But it is also a one-of-a-kind movie. It's the only movie about her that I know of. So I am going all in.

Stock: Long

Call: Long

Put: Short

'Amelia' Theatrical Trailer @ Yahoo! Video

Another interesting weekend at the box office. I got a couple of things right: I nailed ASBOY ($7 million) and SAW6 ($14 million), getting all three right. Both of those adjusted down. I was wrong about VAMPA ($6 million) and AMELA ($4 million), because both of those adjusted down, as well. I was right about VAMPA's call, and that put me above .500 for the weekend - I got 7 out of the 12. Most fortunately, I got the big one right - SAW6 only pulled in $14 million, and adjusted down by H$30.

There were a couple of great lessons learned this weekend. First, the quality of a film really does matter - AMELA got bad reviews, and that was reflected in the box office. I'm not a big fan of Mira Nair, and I should have taken that into account. Second, this whole business of "branding" movies, i.e., making movies either as part of a franchise or based on other works, is not going so well. Three of the four movies this weekend fit that definition. SAW6 is, obviously a sequel. ASBOY is based on a decades-old cartoon. VAMPA is based on a series of kids' books. The fourth movie, meanwhile, is based on a famous person's life. In other words, there is not an original idea among the four. The one movie that was based on an original idea - PNACT - swamped them all, taking $22 million. I've said it before, and I will say it again: the best way to make money in the movie business is to make a good movie. Period. End of story.

Another lesson, more of a reminder, really, for me, was that each movie has to be considered mostly on its own merits. I have to put myself in the shoes of a hypothetical moviegoer - would I pay $10 to see this movie?

The very last lesson from this weekend is that screen counts count - AMELA only opened on 800 screens, which I am sure depressed the box office. It was also not a strong sign from the studio.

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!