UPDATE: They did it again. Lionsgate’s stock today hit an intra-day and 52-week high of $31.10 on the New York Stock Exchange. It closed at 30.92, up 0.63 or 2.08%. Lionsgate has been on a roll lately, surging in part to the successful Hunger Games and Twilight franchises. Kevin Hart: Let Me Explain from Lionsgate’s Summit Entertainment opened Wednesday with a solid $4.7M from only 876 dates, a surprisingly strong debut.
PREVIOUS, Tuesday PM July 2: It’s becoming boring to report when Lionsgate shares hit a new high. That’s been a recurring story since the beginning of 2013 as the company’s stock price has soared 82.5%, helped in part by successful franchises including The Hunger Games and Twilight. But at least we have an unusual reason for this week’s increase, which pushed the mini-major studio to an all-time high closing price of $29.90 with today’s 2.4% rise following a 6.2% jump yesterday. It isn’t just because the studio’s May 31 release, Now You See Me, is doing better than investors expected, having grossed $104.6M domestically as of the weekend. Lionsgate is benefiting this week from Friday’s re-balancing of the Russell Index, which takes place each year at the end of June. The Index identifies companies that have significantly increased their market value. Many portfolio managers use that information to decide what to do … Read More »
The stock is up about 4% in mid-afternoon trading after Piper Jaffray’s James Marsh raised his price target for Lionsgate this morning by 18.5% to $32 ahead of the studio’s financial report next week for the quarter that ended in March. The analyst says that investors may be impressed by DVD and VOD sales for Twilight, which he figures generated about $150M in revenues for the quarter. In addition The Impossible, a film about the Indian Ocean tsunami in 2004, “largely slipped under the radar,” grossing just $19M at domestic theaters but $154M overseas. He expects Lionsgate’s TV operation to impress with results from Mad Men, Anger Management, and Nashville. Looking ahead, Marsh says that he’s “comfortable that management will find a way to extend the Twilight franchise” while Hunger Games could could do better than expected “driven by international box office and high margin merchandising opportunities.” On Monday Stifel’s Benjamin Mogil also upped his price target, in his case by 16% to $29. He says Lionsgate is “tracking materially ahead” of its financial guidance.
How long will the joyride continue? Lionsgate’s stock closed today +1.6% to $16.86, exceeding the previous record of $16.68 that it reached on November 9. While that’s the company’s best closing price, it’s still shy of the intra-day high of $17.02 that it hit on November 1. But execs at the independent studio have no reason to complain. Investors remain dazzled by Lionsgate’s string of successes this year including The Twilight Saga: Breaking Dawn Part 2, which has generated $227M at domestic box offices in its first two weeks. Lionsgate and Summit, acquired early this year, account for about 12.2% of the domestic box office so far this year, up from 5.8% for the two in the same period in 2011. And the company’s shares have appreciated nearly 111% in 2012.
The billionaire activist investor would have been $345M richer if he had held on to his Lionsgate stock — which closed today at $14.22 per share — instead of selling the bulk of his holdings late last year for about $7 per share. At one point he owned 33% of Lionsgate. But he shrugged off his miscall in an interview this afternoon on CNBC. “You can’t win ‘em all,” he said. “I sent those guys an email congratulating them” following Lionsgate’s success this weekend with The Hunger Games. “You know, it’s very hard to pick stocks, but it’s impossible to pick the right movie. When it was $7 — unless Lionsgate had that big hit — there would be problems, I thought. Obviously we were wrong.” No need to feel sorry for Icahn. His portfolio appreciated 35% last year. “We are pretty proud of our performance,” he says. But if he had held on to Lionsgate, it would have been up 37%, he says. The stock has appreciated 70.9% since the end of 2011.
UPDATE, 6:30AM: Lionsgate shares are up around 3.8% in pre-market trading and are about +4.2% on the Paris stock exchange. For exhibition companies, Hunger Games’ $155M domestic opening buttresses the case that box office sales are back in 2012. Thus far, Q1 is +22% over the same period last year and, should end up this week at least +20%. B. Riley analyst Eric Wold notes that two weeks ago he raised his earnings estimates for Regal, Cinemark and Carmike assuming that overall box office sales for the quarter would be about +14%. “It now seems as though we were overly conservative,” he says. He estimates that Regal’s earnings per share in the quarter could hit 16 cents (vs. the consensus estimate of 8 cents), with Cinemark poised for 33 cents (vs. 26 cents forecasts), and Carmike at 28 cents (vs. 21 cents). The big question now is: How much will Hunger Games sales drop? Most films fall about 50% in their second weekend, but blockbusters are vulnerable to steeper declines. For example, Warner Bros.’ Harry Potter And The Deathly Hallows, Part 2 fell 72% and The Dark Knight was -53%. Hunger Games will lose about 270 domestic Imax screens as they switch on Friday to Warner Bros’ Wrath Of The Titans. These theaters accounted for about $10.6M in ticket sales, or 6.8% of Hunger Games’ domestic total. Still, Cowen and Co analyst Doug Creutz says that the film will power through and … Read More »
Another day, another record closing stock price for Lionsgate. Investors are licking their chops over the expected blockbuster ticket sales for The Hunger Games, which opens Friday. That propelled company shares +7.2% today to $15.28. It also followed a 7.8% jump on Monday. Indeed, Lionsgate’s up 26.9% over the 30 days — and 83.7% just in 2012. The company now trades at an astronomical 63.9 times its expected earnings per share, according to Yahoo Finance. To put that into perspective, CBS, Comcast, Disney, News Corp and Time Warner trade in a range of about 10-to-14 times earnings. Lionsgate bulls are still charging, though. This morning Miller Tabak & Co analyst David Joyce raised his target price for the stock to $17 from $14 “due to continued positive sentiment” toward Hunger Games, which he says could generate $300M at box offices. But even he seems to have had enough. “We are not making further estimate adjustments at this time,” he says.
‘Hunger Games’ Pre-Sells Over 1M Tickets
‘The Hunger Games’ Set For 270 IMAX Theaters; Exhibitors To Offer 3 AM Shows
Based on this morning’s nearly 6%-plus pop in Lionsgate’s share price, you’d never know how badly the company’s fiscal Q3 report released last night fell short of analyst forecasts. The market is forward looking, though, and Lionsgate execs filled their morning conference call with upbeat talk about their movie and TV plans. CEO Jon Feltheimer has high hopes for Charlie Sheen’s upcoming series on FX, Anger Management. The first 10 episodes begin production March 19. If they do well, then it “will be one of our most profitable series ever,” Feltheimer says, adding that Sheen ”resonates with audiences around the world.” The company expects to have Anger Management double run in syndication much earlier than usual, and to have repeats on FX within 2 1/2 years. “We would be shooting it about twice as fast as you’d typically shoot a network show,” Feltheimer said. Now that its acquisition of Summit Entertainment has closed, the company is also cheering tonight’s home video release of Twilight Saga: Breaking Dawn Part 1; the second-to-last Twilight installment will be out earlier than usual to coincide with Valentine’s Day. Lionsgate expects it to sell about as well as the previous film from the series, Twilight Saga: Eclipse. Many stores, including several Walmarts, will stay open past midnight to accomodate fans who can’t wait. Trailers for Twilight Saga: Breaking Dawn 2 will debut at showings of The Hunger Games beginning on its opening night. Not surprisingly, Lionsgate co-chair Rob Friedman says that if author Stephenie Meyer wants to write another Twilight installment, then “we’ll be there to support her.” Read More »
The film and TV company had a net loss of $24.6M, an improvement from its $29.7M loss in the quarter last year, on revenues of $358.1M, down 21.5%. That revenue figure was far below the $421.5M that analysts expected. And the net loss, at 18 cents a share, was below the 13 cent loss the Street had forecast. The bottom line could have looked even worse: Lionsgate included the $11.0M it collected from its sale of Maple Pictures. The company also was able to add $6.1M from its 31.2% stake in EPIX vs a $19.8M loss from last year’s quarter. Lionsgate says that it suffered from “underperformance of theatrical films in the quarter” — where releases included the Conan The Barbarian remake, Warrior, and Abduction – as well as “timing of DVD releases which offset gains in the Company’s television and digital businesses.” The movie operation generated $218.9M in revenues, down 36%. Read More »
Here’s still more evidence that Carl Icahn is getting out of Lionsgate’s hair. The studio’s stock price spiked after the market closed Wednesday when a big block of 3 million shares traded. I’m told the block was Icahn’s, and the sale now takes him down from 3.1% to just 1% ownership of the movie and TV company. The transaction followed Lionsgate’s recent truce with Icahn: it involved a secondary offering for 19.2M of his shares, which brought his control of the studio from 33% down to 3.1%. Today reduces that further still. Maybe now I can retire this photo, huh?
Billionaire Carl Icahn bought 702,877 shares of Lionsgate this week, raising his stake in the movie and TV studio about 0.5% to 33.1%, he says in an SEC filing today. What appears to be his first purchase of the studio’s stock since July 2010 likely will lead company watchers to wonder whether he plans to make another move to take control — possibly at Lionsgate’s shareholders’ meeting in Toronto on Sept. 13. Icahn’s filing says nothing about his plans, just that he bought the stock in a range of $6.74-$6.90 a share. Lionsgate closed Friday at $7. But the timing is curious: The additional shares give him a bit more power if he wants to put directors he favors on the Lionsgate board. Icahn has said that the company’s been mismanaged and spends too much. He could offer other candidates for the board at any point up to the meeting. Last year, Icahn had five nominees, all of whom lost. Lionsgate said on Friday that it is running the same 12-director slate that was elected last year.
Lionsgate has recommended to shareholders that they spurn Carl Icahn’s latest offer to pay $7.50 for outstanding shares. The company just filed its Schedule 14D-9 Report. The report described a September 7 meeting of the board of directors, which unanimously rejected the offer and voted to recommend that shareholders do the same. The reasons included strings that Icahn attached to the offer, but also that Lionsgate management feels confident about recent momentum it has built with recent releases The Expendables and The Last Exorcism, both of which performed well in late August. The company also cited the surprising resilience of the film Kick-Ass, which has grossed $50 million domestic and $100 million worldwide and which just topped the DVD sales charts. Lionsgate also cited a record 26 Emmy nominations, including wins for Mad Men and Nurse Jackie, as reasons to feel bullish on the TV side. Not in the report was the week long meetings held by Lionsgate brass with directors for The Hunger Games, the first in a series of three Suzanne Collins novels that have the potential to be a game-changer for the indie, much the way that Twilight was for Summit Entertainment.
Icahn recently raised his share offer to its highest, after a starting bid of $6.50, which climbed to $7. The stock closed slightly down, at $7.14 per share.
Earnings season has produced better-than-expected results at the major studios and networks with only Disney left to report tomorrow. (Watch for Deadline’s full summary.) But Lionsgate just reported bad news when Carl Icahn is breathing down its neck for that hostile takeover attempt. The mini-major today reported revenue of $326.6 million and adjusted EBITDA of negative $13.7 million for the first quarter of fiscal year 2011 compared to positive $53.4 million for the prior year first quarter. Net loss was $64.1 million in the quarter compared to net income of $36.3 million in the prior year’s first quarter.
The loss was attributable primarily to an increase of $71.2 million in theatrical marketing costs as the Company distributed three wide releases in the quarter compared to one wide release in the prior year’s first quarter. Revenue declined 14% compared to the prior year’s first quarter due primarily to the deconsolidation of TV Guide Network revenue, the timing of television deliveries, the decline in Mandate Pictures revenue compared to a record quarter last year, as well as a decline in home entertainment revenue attributable to the smaller theatrical slate in fiscal 2010. Basic net loss per common share for the quarter was $0.54 compared to basic net income of $0.31 in the prior year’s first quarter.
“Our first quarter was affected by marketing costs for our three wide releases, timing of television deliveries and the underperformance of our theatrical release KILLERS,” said Lionsgate Co-Chairman and Chief Executive … Read More »
The British Columbia Securities Commission dismissed Carl Icahn’s request for that cease trade order against Lionsgate. (Icahn Files Lawsuit Against Lionsgate Board.) The film/TV studio fending off his hostile takeover said it was “pleased”.
Ceasefire Ends; Lionsgate Ponders Icahn’s $6.50 A Share Bid
So now Carl Icahn owns only 33.5% of the film and TV studio, and not the 37.9% he had as of yesterday. Nasty, nasty, nasty. Though it is interesting to see these two camps whack at each other as Icahn tries for a hostile takeover. Here’s how Lionsgate described what it did today:
SANTA MONICA, Calif., and VANCOUVER, British Columbia, July 20, 2010 – Lions Gate Entertainment Corp. (NYSE: LGF) (the “Company”) announced that today it had completed a deleveraging transaction in which approximately $100 million of its senior subordinated notes were converted into common shares at an effective conversion price of $6.20 per share. The conversion price represented a 2.8% premium to Monday’s closing price of the Company’s common stock.
The transaction is a key part of the Company’s previously announced plan to reduce its total debt, as well as its nearer term maturities.
The transaction was effected by the Company’s wholly owned subsidiary Lions Gate Entertainment Inc. (“LGEI”) pursuant to the exchange of $36,009,000 in aggregate principal amount of its 3.625% Convertible Senior Subordinated Notes due 2025 and $63,709,000 in aggregate principal amount of 2.9375% Convertible Senior Subordinated Notes due 2024 in a private transaction. The notes were exchanged for new notes which were identical to the old notes but had an extended maturity date and extended put rights by two years and were immediately convertible at an initial
… Read More »
Another day, another brawl between Lionsgate and its biggest shareholder Carl Icahn as he attempts a hostile takeover of the studio. Today, he gave an interview to Dow Jones newswire saying he wouldn’t rule out supporting a merger between Lionsgate and MGM but slamming the benefit to shareholders of a deal between them. ”I’ve found in my investment career that it’s very difficult but not impossible to cure one problem you have by taking on a second problem,” said Icahn, noting that film libraries are under pressure due to uncertainty about the future of the DVD sales business, which is in decline. ”This is analogous to a couple that is having a lot of problems paying the mortgage on a relatively small house,” Icahn added. “Instead of focusing on taking care of those problems, they’re out negotiating to buy a big mansion down the street that’s rumored to be haunted.” On another front, Icahn says Lionsgate shares are now “artificially overvalued” as the stock price rose to $7.27 today, well above his tender offer of $7 a share, because the studio was being added to the Russell 2000 index at the close of trading. Liosngate insiders insist the the studio’s June 1st reporting of its better-than-expected performance (70% higher than its initial guidance) is the reason for the higher stock price.