Wednesday, May 20, 2009

HSX: Memorial Day Weekend, 2009

We have a slightly odd weekend for HSX coming up. First, Terminator: Salvation For A Franchise is hoping on Thursday, a day early. Stocks won't adjust until Monday, Memorial Day. That's why I am posting about it now. Also, the formula is different than what it normally is. It's [Previous Box Office + (2.2*Box Office Fri-Mon)]. That makes figuring out the value of the stock a shade more complicated.

The stock is currently H$182, down $H10 today, which is really not a good sign. That's down from a high of H$215. Quite a drop. If it drops a couple more points tomorrow, it will halt around $180. If it makes $8 million on Thursday, then it has to make $172 million/2.2 over the next four days to make the price, over roughly $78 million. Add that to our assumed $8 million on Thursday, and you have a five-day total of $86 million, or roughly what Wolverine made over its opening weekend. Except that it is competing with Wolverine and Star Trek.

Don't believe the hype! I don't buy it. This movie is not being made because there's an interesting story, although that's not impossible. It's being made because the studio wants to suck some more money out of the franchise. That's not surprising, but it's also not inspiring. It's also obvious. The first two Terminator movies are great movies in and of themselves, apart from being great action movies. I didn't see the third one, and I am reasonably certain that I never will.

The director is McG, current boy wonder of Hollywood. This is only his fourth movie. Two of his first three were the Charlie's Angels movies. I've read several articles about him recently, but they all fail to mention one thing: Charlie's Angels 2 really sucks. It's just a terrible movie. I like all of the actresses who played the Angels, but the script is just awful, even by the standards of movies that are remakes of cheesy TV shows. That's an incredibly low bar, and that movie didn't manage to cross it.

It's at 37% on rottentomatoes.com, and the positive reviews are damning with faint praise. It stars Christian Bale, some guy named Sam Worthington, and, of course, a couple of actresses, none of whom have received any attention whatsoever in the marketing. And this is a franchise which featured one of the all-time great female action heroes, Linda Hamilton as Sarah Connor in T2. Damn was she hot. Her performance was one of the things that made that movie great. Don't these studio executives ever learn anything?

The strike price is H$90. This is one of those moments when you realize very quickly that the strike price was set back when the price of the stock was higher, and the hype was hotter. The call is at H$3, and sinking fast. The put is at H$5 and rising almost as fast. I think this movie is going to be lucky to crack $80 million over these five days.
Stock: Short
Call: Short
Put: Long

Update Thursday night: There are two other movies opening this weekend, but on the more-traditional Friday. Dance Flick (DANCF) is from a couple of the Wayans brothers. It's a spoof of dance movies, of which I have seen none recently. The trailer has a couple of good moments, but I'm not that intrigued. The stock is at H$27, down from H$34. Hmmm. The strike price is H$15. Because it's a three-day holiday weekend, the adjust multiplier is 2.2, which means that a $15 million opening weekend would suggest a stock price of about H$33. Way off. The call reflects that: it's at H$0.70. Ooooh, that's not good. The put, of course, is at the other end of the scale. There isn't very far the put can go, but it's going there, at H$3 and change. I don't have a lot to say about this movie, and the numbers seem to be saying it all. Expectations are low and sinking. Stock: Short
Call: Short
Put: Long

In the wanna-be blockbuster category is Night at the Museum: Battle at the Smithsonian (NMUS2), also in contention for longest and and clumsiest title of the year. I wasn't a big fan of the original; it felt a little too cliched for me. But I do like Ben Stiller, and so do many other people. He is funny in the right context. It is a humorous concept, with lots of potential. The stock is up today by H$2.50, to almost H$173, just barely off the high. The adjust multiplier is 2.2 for the three-day holiday weekend, just like it is for Dance Flick. The strike price is H$80; if it makes that, the stock will adjust to H$176. So it's close. It's at 41% on rottentomatoes.com, almost exactly the same as Dance Flick (40%). There's not much competition for comedies, but there is a lot of competition, period, in the multiplexes. Strike price is H$80, with the call below H$2, and the put above H$5. Looks like an $80 million opening weekend is optimistic. As I think about that last sentence, it's almost obviously true. $80 million for an opening weekend is almost always optimistic. This could do $60 million and probably still be very successful. Let's guess around $70 million.
Stock: Short
Call: Short
Put: Long
I was right about the hype surrounding T4: It did not, in fact, crack $80 million, only about $65 million over the five days. It adjusted down H$49. Whoa! Dance Flick actually came in slightly at the high end of expectations, at $13 million. It adjusted up about H$1.50. NMUS2 came in exactly at my prediction, $70 million (although that's only an estimate, and might be adjusted by final numbers tomorrow). It adjusted down H$16. I was slightly off on DANCF, but dead on for the other two. A good weekend for me, not so good for Mr. McG. Remember, when someone makes a movie with a barely coherent plot, with scenes obviously from several different versions of the script, it means that they probably not a very good director.

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