Tuesday, June 23, 2009

HSX: June 24, 2009

I'm posting on a Tuesday because there is a big movie opening tomorrow, Wednesday, and it's going to get a fair amount of attention. That would be Transformers 2 (TFMR2). HSX is having technical problems, so I can't link to the stock (correction: HSX was having technical problems, they have been solved). This is not surprising, since they are launching v4 tomorrow. Supposedly they are going to be down for only a day or so. I think it's kind of a weird decision to launch a new version on the day one of the biggest blockbusters of the year opens. You would think that they would choose a slow kind of day to make this transition. But no! I know the strike price is H$100, but I'm not sure how they are calculating that, over three or five days. I also seem to recall that the price of the stock was around H$340. Last time I checked, a day or two ago, both of the options were around H$2. I'm just going to go way long.
Update Wednesday morning: the call is at H$5 plus change and rising, the put is at H$2 or so and falling. Why the put managed to get above the IPO price is beyond me. Screen counts? We don't need to stinking screen counts. Critics? I cannot imagine a movie less immune to critical consensus. I'm not even going to bother with either screen counts or critics. There are action adventure blockbusters with artistic merit. This is not one of them. This is the ultimate guilty pleasure.
Stock: Long
Call: Long
Put: Short

Update Monday morning: Well, the movie gods smiled on Michael Bay and the Transformers, even if the critics didn't. It cleared $201 million over five days, a rather spectacular opening. It adjusted up H$54, also rather spectacular, considering the stock was already in the stratosphere. I didn't blog about My Sister's Keeper, because of the upgrade on Wednesday and Thursday, and because I was traveling on Friday. But it did fairly well, opening with $12 million, and adjusting up H$5. I had the call short and was long the put, with a strike price of H$10. So I got burned on the options, but I was long on the stock, so that mostly worked out.

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