HSX: Week of February 13, 2009

Guess what tomorrow is. Friday the 13th. Guess what movie is opening tomorrow. Friday the 13th, Part XXXVIII. They're really going to go hog wild when they make the 13th version of this movie, aren't they? This one is actually Part 11 (FRI11), although I don't think that's part of the marketing. I have no idea how they are going to "re-imagine" it this time, and I don't really care. The stock is on a steady march upward, which suggests that the previously starving actors and actresses who star in this will hopefully be able to do their part to stimulate the economy when they get their royalty checks. It's at H$74.70, a new high, and up H$3 for the day. That's unusual - traders usually take profits on the day before a movie opens, so the buzz on this one must be very good. The director is Marcus Nispel, who directed the remake of The Texas Chainsaw Massacre and Pathfinder. The former was highly successful, the latter less so, largely because it sucked. The strike price is H$25, with the call trading very high, near H$6, with the put looking like a victim of Jason. Here's a bit of trivia: in Microsoft Word, there's an annoying tendency (at least there was; it may be fixed in the later versions) for tabs to show up every quarter inch or so. They are called "Jason tabs" because, like the character in these movies, they just keep coming back. Seriously. I'm going with $29-$32 million.
Stock: Long
Call: Long
Put: Short as the blonde chick's life span in this movie

Hopefully much more intelligent, and possibly much scarier, given that it is a thriller about the international financial system, is The International (NTRNL), starring Clive Owen and Naomi Watts, everybody's favorite almost-A-listers. The stock has been heading sort of casually up, and it currently about H$30, down from a high of H$35. The director is Tom Tykwer, a German who made the great Run Lola Run. I'm a fan of finding out something out about the producers on a movie as a way of refining my guess about the opening weekend. One of the producers is a guy that I have never heard of, Charles Roven, but who made this year's favorite Oscar snub, The Dark Knight. The Dark Knight (+ Digital Copy and BD Live) [Blu-ray] is probably the one you want to buy to remind yourself how much the Academy messed up this year. Good peeps involved in this movie with an incredibly boring name, so hopefully it won't get beaten up too badly by the other movie being released this weekend made by a German director (Nispel is also German). Strike price is H$10, right on target. Call is nice and high, while the put is just barely above H$1. The reviews might actually matter on this one, so I checked out Rotten Tomatoes, where it's getting a somewhat respectable 56%. My guess is that word of mouth will be solid. And bankers are certainly a good choice for bad guys these days. Look for something around $12-$14 million.
Stock: Long
Call: Long
Put: Short

And now for something completely different: Confessions of a Shopaholic (SHOPA), which will be either the victim or the beneficiary of some extraordinary timing. This might be the perfect movie for right now, or it might be absolute worst. I'm leaning towards this moment being a fortuitous moment to release a movie about a woman who has severe financial problems. It looks funny, and Isla Fisher looks great. Reviews are unkind but not savage, with only 22% on RT (below Jason's current 27%). Stock is at H$52, a high, with the trend generally, but not completely, positive. Strike price is H$20, again, right on target. The call is at H$3, but that's down from H$4, so doubts are creeping in. The put is not far off, H$2.39. Rarely do we see the options so close in price. I think the market is as confused as I am. Four things make me slightly optimistic. First, we know that the market undervalues chick flicks, as it did last weekend with He's Just Not That Into You. Second, like that movie, this one has a fair amount of star power, including Joan Cusack and Kristin Scott Thomas. Third, a comedy about finances sounds like fun to me right now. Fourth, the producer is the real star here, much more well-known than anyone else: his name is Jerry Bruckheimer. Yes, the man more known for his ability to make movies for guys made a movie for women. I don't bet against him. Going a little out on a limb, I'm looking for something around $21-$23 million.
Stock: Long
Call: Long
Put: Short

Update Friday morning: FRI11 is doing well, up H$4 - very good sign. The International dropped H$2.50 this morning, not good, but maybe just normal noise. But Confessions of a Shopaholic is tanking, down H$3.75. Time to bail, which is what I did. Rating on RT is down to 19%. Looks like a bomb, which is too bad for Isla Fisher. The irony of the timing might be just too much.

Update Tuesday afternoon: Well that was certainly a great weekend for Friday the 13th. It cleared $45.2 million, adjusting up $H21 to H$99. Not bad for a remake. Confessions of a Shopaholic came in below expectations at $17.3 million, adjusting downward H$8. Good thing I shorted it Friday morning! Note: I forgot that this was a four-day weekend, but that didn't really affect my predictions. Finally, The International adjusted slightly downward, about H$4.5, bringing in $10.7 million. 2 out of 3 ain't bad. I made a ton of money on the FRI11 call, did well on the put, and split the difference on the other two, so I made money on 6 out of 9 securities, and, on the losers, only suffered minimal losses. Another good weekend!