Thursday, December 4, 2008

HSX: Weekend of Dec 5-7, 2008

This weekend is a slow one for movies. The only wide releases are Nobel Son (NOBEL) and Punisher: War Zone (PUNS2). I didn't think I had any interest in seeing either, but Nobel Son sounds like it could be a wild ride. Roger Ebert liked it, not a bad sign. Looks like this is going to be a love it or hate it indie film. I might take a chance on it in the theater. Gotta love Alan Rickman as a nasty Nobel Prize winner. On HSX, I covered my short and went long today - it's been going up at a meteoric rate over the last month. There are no options, probably because the price has been so low.

I am much more certain that I will not be seeing Punisher: War Zone (the sequel to the first Punisher), largely because I had absolutely no interest in seeing the first, and have not had any regrets whatsoever about that decision. There are mixed signals from the stock and options. The stock has been tanking for a while: I shorted it, and am making money on the short. The price of the stock is H$25, which suggests an opening weekend of $9 million. But the call ($10 strike price) is at H$4.88, which predicts an opening weekend north of $15 million. Strangely, the put is at H$2.78, which means an opening weekend below $7 million. I checked two funds, to see how they are playing this. The Action Fund is going long, but bought it at H$28. The Comics Fund is shorting from $H35. Both of those make sense. I'm going to hold off judgment until I see what happens tomorrow morning. Probably staying with my short of the stock and the call, and going long on the call. I just can't see a big audience for this movie.

Update Monday: Cadillac Records and Nobel Son both adjusted down slightly, although they were both up today. I think Cadillac Records will probably build slowly, so I'm still holding it long. Same with Nobel Son, although I seriously overestimated its appeal. It really is just a minor indie release, I should have treated it as such. But since the price is so low, there wasn't much risk either way.

Punisher, though, is a bomb, and I was right to short it. It cratered. I shorted it at H$30; it's trading at H$10. Made only $4 million this weekend. So I was right, there wasn't a big audience for it.

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