"Avatar" a Boon for IMAX (IMAX)
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With the release of James Cameron's sure-to-be hit Avatar, IMAX Corp. (NASDAQ: IMAX) shares have recently jumped up to reach a new 52-week high today. Shares are up 3.6% to $12.94, and have been as high as $13 around noon.
IMAX has been on a decent upward trend since lows in March and April. The stock broke through its 200 SMA of $5.00 on April 10, and has been above ever since.
The movie Avatar is rumored to cost over $300 million, which makes the break-even rather steep. With marketing factored in, the cost is expected to be $500 million. For context, $500 million is just under half the entire GDP of the Maldives off the coast of India ($1.26 billion in 2008). Titanic went on to gross over $1.8 billion in its lifespan, and cost $200 million ($265 million in 2009 dollars) to make. There are currently no reputable sources of revenue estimates for this film, though many may come out on Monday or Tuesday after weekend traffic and sales are recorded.
IMAX is not a typical company that you think of when you trade stocks. With a market cap of $807.45 million, IMAX focuses mainly on larger-than-life, expensive theatrical productions that only increase in cost with the addition of 3-D (which it converts itself). The company has 351 theater systems, or which 231 are commercial and 120 are institutional. It is a global company, having operations in 42 countries.
Their first film, Tiger Child, was a 17 minute short that played in Japan, and had an aspect ratio of 1.44:1 (compared to Avatar's 1.78:1). The company has covered everything from space exploration, rock bands, history, mountain climbing, authors, dinosaurs, and more. The most recent IMAX 3-D movie to play was A Christmas Carol with Jim Carey.
With the release of Avatar in 3-D, the way is being paved for IMAX to cash in on the public's fascination with living the movie more than simply watching the movie. How much of the movies success is priced into the stock though is a question investors need to ask themselves.
IMAX has been on a decent upward trend since lows in March and April. The stock broke through its 200 SMA of $5.00 on April 10, and has been above ever since.
The movie Avatar is rumored to cost over $300 million, which makes the break-even rather steep. With marketing factored in, the cost is expected to be $500 million. For context, $500 million is just under half the entire GDP of the Maldives off the coast of India ($1.26 billion in 2008). Titanic went on to gross over $1.8 billion in its lifespan, and cost $200 million ($265 million in 2009 dollars) to make. There are currently no reputable sources of revenue estimates for this film, though many may come out on Monday or Tuesday after weekend traffic and sales are recorded.
IMAX is not a typical company that you think of when you trade stocks. With a market cap of $807.45 million, IMAX focuses mainly on larger-than-life, expensive theatrical productions that only increase in cost with the addition of 3-D (which it converts itself). The company has 351 theater systems, or which 231 are commercial and 120 are institutional. It is a global company, having operations in 42 countries.
Their first film, Tiger Child, was a 17 minute short that played in Japan, and had an aspect ratio of 1.44:1 (compared to Avatar's 1.78:1). The company has covered everything from space exploration, rock bands, history, mountain climbing, authors, dinosaurs, and more. The most recent IMAX 3-D movie to play was A Christmas Carol with Jim Carey.
With the release of Avatar in 3-D, the way is being paved for IMAX to cash in on the public's fascination with living the movie more than simply watching the movie. How much of the movies success is priced into the stock though is a question investors need to ask themselves.
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