Well, Viacom's (NYSE: VIA) Transformers: Revenge of the Fallen took command of the domestic box-office weekend. No surprise after observing what the film did last Wednesday when it opened. According to Boxofficemojo, Fallen, as of early estimates, grossed $112 million during the three-day period starting Friday. The film has taken in over $200 million so far once the days leading up to the weekend are added in. Excellent business. Especially considering that the sequel is doing better than its predecessor at this point, according to a comparison chart (this chart includes a comparison with Iron Man as well, so just focus on the Transformers franchise).
Growth. You've got to love it. I'm sure Viacom does. Disney (NYSE: DIS) isn't doing badly, either. Although not a huge hit, The Proposal did respectable business. It came in second with $18 million. It should eventually reach $100 million.
And I'm sure the execs at the Mouse are crowing about Pixar's Up. The cartoon came in fourth behind Time Warner's (NYSE: TWX) The Hangover (can you believe this comedy is a lock for a $200 million gross?). Up should come close to $300 million by the time the project completes its run.
Are there any trading ideas from this weekend's box office? Well, according to one analyst, Viacom should not be bought since its valuation might be out of whack because of all the Transformers-sequel excitement surrounding the shares. Such excitement might not translate into meaningful financial gains. The analyst is concerned with the same thing I'm always concerned about: the ultimate cost of expensive talent participation. Michael Bay will control a significant part of the cash flow derived from Fallen. I would agree with this analysis: I think trading Viacom right now might be too risky.
It will be interesting to see how Hasbro (NYSE: HAS) fares on Monday. The company's Transformers merchandise should receive a lot of attention at retail on the heels of Fallen's success. Lately, the stock hasn't been so hot. The situation might change, though, depending on news flow based on consumer reaction to the toys. We'll have to wait and see what information there is on that front. I would nevertheless keep an eye on Hasbro.
Disclosure: I own Disney; positions can change without notice.
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