Daniel Jones just penned an article about Lionsgate. The main point is that the current quarter is going to be so bad, with Exp 3 and Step Up doing so poorly at the box office, that a write down is now a possibility.
That article like many on seeking alpha doesn't really make its point. I don't even understand what a write down on a movie would be. Normally when you take a write down it is when you take an immediate loss on something that would normally be capitalized over several quarters. This is done for both tax reasons and to keep the constant losses from being a drag on future earnings. I am pretty sure that most movie costs are already taken immediately and are not capitalized over time and therefore there would be no write down.
It seems that the author as outlaw has pointed out is out of his element and doesn't have a good grasp on what his talking about. I think he meant they would report a loss on the movie which is not the same as a write down and LGF does not report on individual movies in any case. Also, we have no idea how much exposure LGF has left after selling at least some of the international rights and of course there will be continued revenue from other sources other than the box office.
Yes the movie was a huge disappointment and will not add to the bottom line as we had hoped (and may actually be a loss) but many of us have been saying for weeks that it would struggle in the US and the international box office would decide the profitability of the movie. Also remember that the movie has a staggered release internationally so it will be a while before we know where it will end up.
You mentioned Step Up but he didn't and that is because the international box office take alone has already surpassed the assumed budget (I haven't seem definite budget numbers). Again not being overly bullish because it was assumed it would do a lot better but neither of these movies are enough to move the needle for the stock nor should you think they should.
Jamie Linden will write the screenplay of Lionsgate’s franchise starter “Chaos Walking: The Knife of Never Letting Go.”
Robert Zemeckis has been attached to direct for the past year. Charlie Kaufman originally adapted the screenplay from Patrick Ness’ novel of the same name.
Producers are Doug Davison, Allison Shearmur along with Zemeckis and Jack Rapke through their Imagemovers banner.
“Chaos Walking: The Knife of Never Letting Go,” published in 2008 as the first book in a trilogy, is set in a dystopian world where all living creatures can hear each other’s thoughts.
The book is centered on the only boy in a town of men, who discovers something awful hidden from him and is forced to flee with only his dog. With the townspeople in pursuit, the duo then stumbles upon a strange and silent girl and set off on a white-knuckle journey in which the boy must unlearn everything he knows to figure out who he truly is.
All three “Chaos Walking” titles have been shortlisted for the Carnegie Medal, with the final “Monsters of Men” winning in 2011.
Lionsgate hired Linden this year to adapt John Corey Whaley’s novel “Noggin” and he recently wrote “Money Monster,” with George Clooney starring and Jodie Foster on board to direct. He also wrote “Ten Years,” “Dear John” and “We Are Marshall.”
Lionsgate’s Erik Feig, Jim Miller and Matthew Janzen are overseeing “Chaos Walking.”
Thats funny. Daniel Jones the teenage looking dude who posts for free seeking alpha and has as much knowledge about LGF as my mother. Haha The guy who assumes LGF paid for the entire budget of E3 out of pocket and doesnt know that LGF isnt even the distributor for most countries outside the USA. The guy who doest consider the continued streams of money for E3 once the box office widow closes. That guy? HaHa Lets see his bio he created on some free page has him as a hedge fund manager with himself as the only client with $30,000 total assets and a work history that include Wendys in 2009. A whole two years trading presently after he left some job as an Ohio hospital worker. (No offense Daniel if you ever read this but dude your article is light on info and facts yet heavy on uninformed. You never want your readers to have more knowledge than you. Do enough homework to make valid points good or bad.) Write down really??? Only if the illegal leak makes it a smart move. If the movie would have bombed without the leak we would have been in worse shape IMO.