Will Hunger Games Satisfy Investors?
The Hunger Games is a new trilogy written by Suzanne Collins. Set in a future where the Capitol selects a boy and girl from twelve districts to fight to the death on live television, the series has captured readers worldwide. On March 23, the story looks to capture moviegoers as well.
Unlike Walt Disney’s (NYSE:DIS) “John Carter,” which will likely force the company to take a $200 million writedown, The Hunger Games series is expected to be a huge box office hit. The film, which opens this Friday, has already earned an estimated $8 million through one million advanced ticket sales. Deadline Hollywood estimates the film could earn $100 million in its opening weekend. As a result of the anticipated success, stocks associated to the film are seeing a boost.
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Scholastic Corp. (NASDAQ:SCHL), which publishes the book series, raised its annual profit forecast last week due to strong sales ahead of the film release. Richard Robinson, President of Scholastic, said in last week’s earnings call, “We were especially proud of the success of Suzanne Collins, The Hunger Games trilogy, yet another Scholastic published global phenomenon with this large crossover readership by adults. Sales of the series reached a high point in the quarter, ahead of next week’s highly anticipated movie release.” Shares surged more than 20 percent on the news, hitting a new 52-week high. The company expects earnings earnings from continuing operations to come in at $2.50 to $2.90 per share, compared to previous estimates of $1.75 to $2.10.
Lions Gate Entertainment Corp. (NYSE:LGF) is the studio behind the movie adaptations. While the studio had a modest marketing budget of $45 million, it made the most of it. Lions Gate used traditional marketing tactics such as newspaper ads and magazine cover stores, but the company also embraced technology. Lions Gate has been promoting the future blockbuster for a year on digital media outlets such as Facebook, Twitter, YouTube (NASDAQ:GOOG) and Tumblr. There are even Apple (NASDAQ:AAPL) iPhone games that fans can play. Furthermore, Yahoo (NASDAQ:YHOO) is scheduled to provide live streaming from the movie premiere. In the past month, shares of the studio have jumped 18 percent, while posting a gain of 83 percent year-to-date. Longer-term, Lions Gate looks to receive more strength from The Hunger Games, as there are three more films to be released in the coming years.
In addition to being released in thousands of theaters nationwide, The Hunger Games will be played in nearly 300 IMAX Corp. (NASDAQ:IMAX) theaters. The huge-screen theater company has already sold out of the midnight show at many locations and some are adding 3 a.m. shows to accommodate the strong demand. “We have rebalanced our programming over the course of the last year,” Greg Foster, chairman and president of IMAX Filmed Entertainment, told TheWrap. Shares of IMAX Corp. have increased 10 percent in the past month and more than 40 percent year-to-date.
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