Tuesday, June 29, 2010
Stick a fork in it...
As always, stay valued, my friends. Continue...
Monday, June 28, 2010
What We've Learned this Weekend: 6/28/10
1. Pixar can't stop, won't stop.
Averaging $14 mil a day during the week and continuing the trend with a plus-sized second weekend of $59 mil, TOY STORY 3 keeps making me reset the JCC Target. While now targeted at $315, it's not quite the SJP we thought it would be, but still will provide positive value when it's all said and done. Currently trading at $331, there's still about 5% more value to be had in shorting this film.
2. The market is still slow on the uptake.
That's the only way to explain how/why JONAH HEX, with an anemic $1.6 million weekend and on pace for our JCC Target of $12.74 mil (if not its 2.7 multiplier of $14.53 mil) is still being traded at twice that amount. At $24, it's a joke - and still open to value hunters all over with a 91% difference between our target price and its current price.
Same goes for our beloved A-TEAM, which, with one week left to go, still hovers over $80 when it can't possibly make more than $73. Short away, my friends. I just wonder if the HSX will be as painfully unaware as the real-money Cantor Exchange.
And speaking of...
3. THE CANTOR EXCHANGE WAS APPROVED BY THE CFTC TODAY!!!
Never mind that Congress has language in the conference version of fin-reg designed to kill it. With Cantor and crew the most trading ready of the two approved markets, look for them to dive headfirst into trading ASAP, and battle any future legislation in the court system.
TWILIGHT: ECLIPSE is trading at a laughably high $328, despite our $321 short position. Get a grip, y'all. Nobody male over the age of 25 cares about this franchise, which runs incredibly hot in its opening weekend (we predict a $120 million haul) before dropping precipitously (i.e. 72% for its second weekend for NEW MOON). Neither one of the previous TWILIGHT movies have even sniffed $300 milli, nor will this one. It doesn't have 3D and it's one-demo focused. IMAX will help, but only so much. It's our current SJP of the moment, currently overvalued by 24%. Although pre-release hype is currently killing my short term portfolio, anticipate long term riches. Get short, like, right now.
And with that, enjoy your week. Real money trading is just around the corner! Stay valued, my friends.
Continue...
Friday, June 25, 2010
What I'm Seeing this Weekend 6/25/10
So I'm going to see KNIGHT & DAY today. There, I admitted it in the open. It seems like critics and general opinion is hot to hate on this movie. In two hours time, I shall be able to decide for myself.
But this is a weekend of uncertainty. JCC has taken no position on the wide openers of KNIGHT and GROWN-UPS. Despite previously proven box office stars, Tom Cruise's inconsistent box office of late and the sheer crudity/stupidity of Sandler's marketing for his latest have the distinct smell of stank - and unpredictability - to both of these movies. I know my limits - and will happily stick to my more surefire bets like riding JONAH HEX all the way down to the ground or watch our beloved A-TEAM sputter along to fully realize its 18% overvaluation.
A word on TOY STORY 3: This thing is a monster. Yes, our earliest predictions totally shortchanged it. Still, we feel comfortable at shorting it at $335, although it has not developed into the Sarah Jessica Parker stock we hoped and dreamed it could be. Still, we will take an 11% gain and $38 profit any day. We just will have to ride it out to delist, apparently, before we make believers out of the market.
So KNIGHT & DAY, GROWN-UPS (ugh), and even indie WINTER'S BONE is on the docket for this weekend (and speaking of indie, go see SOLITARY MAN starring a tour de force of lechery for Michael Douglas. Such an ugly, warts-and-all performance, it'll surely garner Mr. Zeta-Jones some Oscar talk). Enjoy the sun and stay valued, my friends.
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Sunday, June 20, 2010
What We've Learned this Weekend: 6/20/10
1. Never doubt Pixar. Ever.
Okay, so we didn't exactly DOUBT Pixar, but we did think $120 million for TOY STORY 3 was a bit much. And while $109 million is nothing to sneeze at, it still does not change our short position at $335.
2. People can't do math.
$109 x 2.7 = $294. So why, throughout the weekend until this morning, was TS3 trading for as high as $352??? Yes, we were all a bit emotional after TS3's monster $41 million Friday. But let's examine a few facts, shall we?
- Only one animated movie in the history of mankind has grossed over $300 million in 24 days: SHREK 2 in 2004.
- Only one Pixar movie has ever grossed over $300 million period: FINDING NEMO in 2003 at $339 million. How long did it take for it to cross $300 million? Fifty days.
- But that was 2003. Adjusted for inflation, NEMO's overall haul would have equaled $447 million (all numbers are courtesy of our friends at BoxOfficeMojo.com). That's a 24% 2010 markup. So in 2010 dollars, NEMO would have crossed the $300 million threshold in 228.76 million 2003 dollars, or 24 days.
- In comparison, NEMO's opening weekend was $70.2 million, or $87.1 mil today. Let's say that if NEMO had been released today, it most likely would have enjoyed all the advantages of current animation technology and exhibition, meaning it would have come out in 3D on ginormous IMAX screens a la TS3. With an additional 18% markup for IMAX and 3D screens, NEMO's opening weekend would have equated to $102.72 million today. So using the industry-standard 2.7 opening weekend multiplier to estimate 24 day performance, the most successful domestic film in Pixar history would have a current day $277.34 modern day gross.
- Even with TOY STORY 3 running 5.8% ahead of this inflation-and-IMAX/3D-adjusted NEMO gross after this opening weekend, we still stand behind our $278 target valuation. Let's not forget that last year, the critically and audience acclaimed Pixar four-quadrant hitter UP enjoyed the same technological advantages as TS3 (okay, maybe a few less IMAX screens, but still the 3D surcharge) and grossed "only" $294 million - over the life of its run. While I have no doubt that TS3 could cross $300 million, I just don't think it will be in the first 24 days. All of those teens and tweens who grew with the TOY STORY franchise will be sucked into the Twihard vortex of ECLIPSE in five days, with mostly adults and young children left to see TS3 and THE KARATE KID.
3. JONAH HEX is the MACGRUBER of PG-13 action this summer.
Talk about your death knells. $5.1 million? For an opening weekend??? I saw JONAH freakin' HEX. And it wasn't that freakin' bad. It also wasn't that freakin' good to overcome the critical stank ahead of it.
Please believe that after Nikki Finke's Deadline posted late Friday night estimates for the weekend for JONAH HEX, I dumped whatever remaining money I had into shorting the hell out of it, even though I was already realizing hefty profits at an average of $82 paid. Even at $65, we're at a whopping 59% profit, and climbing. If JONAH HEX actualizes its dreams of becoming one of the lowest tentpole movies this summer at $13-14 mil, we could be talking up a 79% profit. That's just plain wrong.
4. Don't doubt the power of Twitter.
There is no other explanation for why Ashton Kutcher's KILLERS still squeezed out $5 million this weekend. Surely it's because of his devoted millions-plus Twitter following that this movie isn't a glossier version of JONAH HEX at the box office. Even though we've already booked a gaudy 45% gain on this movie, a movie this uninspired should be performing even more poorly. I'm disappointed in you, Ashton. Aim low!
5. There are a lot of haters out there for Jaden Smith.
So there you have it. Expect next weekend to have similarly emotional weekend fluctuations with TWILIGHT: ECLIPSE poised to open to a $100 million-plus weekend, only to recede with 62% and 70% weekend-to-weekend drops like tidewater from the sand. But here at JCC, we all know value. And we're in it for the (24 day) long haul.
Stay valued, my friends.
Continue...
***THE REEL DEAL ARCHIVE***: WALL*E
Players: Voices of Ben Burtt, Elissa Knight, Jeff Garlin, co-writer/director Andrew Stanton
Logline: In a vast, empty, junkyard of a 28th century Earth devoid of human life, WALL*E (Waste Allocation Load-Lifter * Earth Class; voiced by Burtt) goes about his business trash compacting the planet until the arrival of EVE (Extraterrestrial Vegetation Evaluator; Knight), a glistening, ethereal and, well, all-out lethal probe droid, for whom WALL*E falls and chases throughout the galaxy as she races to report her findings to the last vestiges of a bloated humanity living upon a giant, corporate-sponsored spaceship nation called Axiom.
The Deal: I have only one question: How on (or out of the) Earth do the creatives at Pixar keep hitting it out of the park? Like an artistic Barry Bonds on animation steroids, "WALL*E" is a positively darling, offbeat movie featuring a strong eco-friendly message with as solid a story as we have come to expect from the Pixar crew. Straight out of the "so ingenius it's genius" territory, Stanton's (Finding Nemo - one of my all-time favorite movies) "WALL*E" enjoys itself immensely with foreign interpretations of our everyday junk, from bubble wrap to Twinkies to cheesy Technicolor musicals. When we do see the human race, which has long since left Earth on Wal-Martesque-owned Buy N Large's corporate nation-ship, it is one lazy, overfed society where everyone's fat and overly catered to by smart device, with their only responsibility to be distractedly happy. A testament to how potent the now-perfunctorily seamless Pixar visuals and story are, dialogue is at a premium in this script, as WALL*E communicates via a myriad of sound effects, (as does his would-be paramour EVE) orchestrated by an aptly expressive, instructive Thomas Newman (Finding Nemo) score. There's more than a touch of "I Am Legend" to the opening, as it's just WALL*E and his cockroach best friend, cleaning the earth one junk cube at a time.
At its heart, "WALL*E" is an intergalactic love story. Voiced by R2D2 himself, Ben Burtt, WALL*E is a lonely, resourceful little fella with tons of personality who quietly yearns to be in love, thanks to his endless viewings of "Hello, Dolly!" He's curious, loyal, romantic...he's the perfect man. Because he's a machine. EVE, on the other hand, with her chubby white body and laser cannon arms, hovers and flits around with fairly bad intentions. Not only is she technologically superior to the earthbound WALL*E, but also her answer to everything is shoot first, ask questions never - she's a robotic Dick Cheney (sorry, that was redundant). Even though WALL*E's love is fairly unrequited initially due to EVE's laser-like focus (literally) on her prime directive, they develop into a genuinely bilateral symbiosis, sometimes with heartbreaking results. Is it sad that one of the most admirable love stories of the summer is between two (allegedly) inanimate objects...animated, or inspiring that artisans exist at Pixar to unfailingly provide us attractive, quality entertainment every. Single. Summer? I'll take "Inspiring" for $200 (million), Alex!
Move over, Carrie & Mr. Big. Here comes EVE and WALL*E!
@@@@ REELS
(FOUR REELS)
An urban legend/instant classic.
Continue...
Friday, June 18, 2010
What I'm Seeing this Weekend 6/18/10
Naturally, I'm seeing TOY STORY 3. I have no doubt Pixar will entertain. However, I am over the age of seven, have no kids, and am not super-crunk to go see this one. The last TOY STORY was some 11 years ago, when I had even less reason to cotton to Pixar movies as fledgling adult, so I don't share any nostalgia for this trilogy.
And it is that muted interest that I am counting on. Over here at JCC, we are shorting TS3 (as our SJP of the moment) at $335, targeted at $256. While the blogosphere is abuzz with $120 million opening predictions, I predict an opening in the $95 million range.
All these $120 mil openings floating out there are ridiculous. IRON MAN 2 was the highest tracked movie of the year – EVERYBODY knew about it/wanted to see it – and it could only scrape together $128 million. Pixar’s highest opening weekend ever was for THE INCREDIBLES (a fine movie) with $70.5 mil in 2004. Even in 2010 dollars, that’s probably about $77-79 mil.
True, 3D and inflation may add some more to potential box office, but Pixar doesn’t do huge, blockbuster openings. They do very large openings with long, long legs (which is why I am short on TS3 at $321; it may get there in cume, but not in 24 days). Pixar movies tend to gross less than 30% of their final gross in their opening weekends, as opposed to the SHREK movies which average over 30% – LEGS. Plus Mom is only mildly interested in seeing it this weekend; don't doubt my box office bellwether!
Believe it or not, I am going to see JONAH HEX as well. I think its marketing has been atrocious, the lead is so disfigured as to be unwatchable, and Megan Fox has proven not to be able to open a closet door outside of the TRANSFORMERS franchise. But it's got John Malkovich, Lance Reddick ("Fringe", "The Wire") as a Reconstruction-era Q-like gadgets guru, and it's still got the visuals of the very same Megan Fox. It's worth a peek. Also, I want to see what a 12% Rotten Tomatoes reviewed film looks like, so I can gleefully watch how far it will drop (shorting at $82 it has already plummeted 45% and past my wildest dreams). Box Office Predict's $10.6 estimate holds true, that sucker could sink to $28. We can only hope.
The rest of the portfolio, with its gaudy 24%-positive per position status, is pretty damn healthy considering TWILIGHT hype has surpassed its true value at this point. But when hype and reality meet after next weekend, watch for IRON MAN 2 like drops...
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