First up in the non-Oscar nominated group, Renee Zellweger stars in a classic fish-out-of-water story, New In Town (NTOWN). She's an executive from the Big City (Miami), who somehow lands in the Great White North, where they all talk like the people in Fargo, doncha know, or Sarah Palin, also, and they have quaint cultural traditions that she is of course completely clueless about. But along the way she meets a tough but sensitive guy, and they have some fights, and some awkward but funny moments before they fall in love. Stop me if you've heard this one before. It's trading at H$18, so the expectations are somewhere between low and whatever. But the stock's been climbing, so there may be some gold in the cliches. The strike price for the options is $5. Renee Zellweger has to have more star power than a $5 million opening weekend, doesn't she? Probably - the call is at H$3 and change, while the put is less than half a buck. We all need love, right? We also seem to think there is some residual affection left over in American audiences for Ms. Z. My guess is that it will open around $7 or $8 million.
In a slightly more original vein, Liam Neeson stars as an ex-soldier whose daughter is kidnapped in TAKEN (TAKEN). He has to get her back. Every parent's nightmare. I don't think of Liam Neeson as an action star, but I could have him figured wrong. I saw him on The Daily Show, and apparently he was a boxing champ in Northern Ireland. He's also 6'4", which I didn't know. He describes this movie thusly:
"It's kind of a lovely, no-brainer, slam-dunk little action film with no pretensions."Isn't that nice - a sweet, honest, down-to-earth movie about kidnapping, sexual slavery, kicking ass, taking names, and breaking heads. I have no interest, but it could be a sleeper. The price of the stock looks like a hockey stick, pretty much an onward and upward trajectory of late, to H$44. Strike price is H$10, which is almost laughably low - HSX must have priced the options when it was around H$30. The call, no surprise, is around H$6. Really could be gold in these cliches.
Call: Longer than long
The Uninvited (UNVIT) is a remake of a Korean horror movie. Even though I live in Koreatown in LA, I have no interest in this, because I have no interest in horror. But the stock has, like our other two movies this week, been moving steadily in the right direction, to H$30. The strike price is H$10, same as Taken, but without the premium on the price of the stock. The call is floating around H$3, which is a little optimistic for me. On the other hand, the put has a zero to the left of the decimal place in the price. This is a rare instance in which I am going to short both options, because I think it will make at least $9 million, but nowhere near $13 million.
Should be some good money made over the weekend, but nothing to write home about.
Update: My predictions were very good. TAKEN turned out to be very popular, even though it's an action movie released on Super Bowl weekend. It grossed $24.6 million, way above estimates. Good news for Liam Neeson. UNVIT and NTOWN both came in almost exactly what the market predicted. The total for NTOWN was below what was predicted by the price of the call, but it was still above the strike price, so that's basically a wash. Other than that minor detail, all of my calls for positions were right.
I shorted TAKEN last night, because after a major adjust upwards like that, you can just about guarantee that there will be profit-taking. Which is exactly what happened - I covered my short at a price H$5.50 below where I shorted it. That's about the easiest way to make money on stocks on HSX. I'm still long my original position, because a movie this initially popular just might adjust above the delist.