What I'm Trading

Sunday, June 6, 2010

What We've Learned this Weekend: 6/6/10

Value hunting on a Sunday morning. What could be better?

SHREK cannot be stopped. The fourth installment continues to chug away, albeit at a pace well below the market rate of $224. At an average price paid of $233, I stand firm at shorting it all the way down to its anticipated delist price of $206.



PRINCE OF PERSIA persists in perplexing people. Now it looks like it won't crack $90 after 24 days, making my long position at $89 somewhat untenable. The second it bounces up 2%, it's time to chuck this film for no gain and steer clear.


As you may notice, MACGRUBER is back in the fold. After posting a stunning $96,000 over the weekend (that's a little over $32K a day, y'all), I had to jump on this. At $8.4 mil after three weekends with a current market price of $12.10, there's at least 35% in value lying in wait. How did I arrive at an $8.94 target? If you assume an average of $32K a day for the remaining seven days, you have a 24 day gross of $8.6 mil. If you are generous and assume $100K during the weekdays and $150K/day on the weekend - numbers it didn't even come close to matching - then you have $9.25. So, conservatively, I split the difference: $8.94. Yet, in all honesty, if you assume traditional 50% weekly audience declines for movies in release, MAC is slack with only $112K for the next seven days for an embarrassingly low 24 day cume of $8.51 mil. I could not get short enough on this film; in fact, HSX blocked me from buying as much as I wanted, capping me at their trading limit. So sad. There's anywhere from 35-42% in value there...


With our more balanced portfolio now (no more 63% portfolio-hogging IRON MAN 2s; our top derivative is TOY STORY 3 at 29.2%) we are well positioned to enjoy the big box office of THE KARATE KID next weekend. Short MACGRUBER, stay away from SEX AND THE CITY 2 as well as PRINCE OF PERSIA...And stay valued, my friends.

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