I agree. There's no such thing as a legitimate business in India. Morengrease is needed there than anywhere in the world.
The modern Chinamen embrace american brands even more so than Americans......I don't see that being a driver. Maybe political, but not social.
They sell technology and don't operate a thing, so I don't know what the Chinese would be wary of.
Regarding the price, I don't think IMAX got a very good one. They got $80M for a 20% cut of 20% of their business. So, for 4% of Revenues they got $80M, which puts IMAX's value at about $2B, which is consistent with today. The thing is, with 2x as many screens already signed in China, it is a certainty that REvenues in China will double in the next 2-3 years. So, the value they got was today's value and didn't considered the impending growth coming out of China, which, again, is a certainty.
That's my opinion.
I agree, again, this move is neutral on paper. We are giving up maybe 10% of all revenue/profits right now for potentially substantial growth opportunities in the future. If Gelfond does anything EXCEPT reinvest this in the company's short-term growth plans AND/OR pay a dividend either quarterly (we're at critical mass already, arent' we?) or a special dividend this transaction will have been a complete waste of time and money. I hope this isn't going to fund the new HQ.
Having the chinaman have skin in the game is a VERY attractive thing long-term, again, I question the value long-term.
There is the possibility that Gelfond has other plans for this money. Maybe there are some strategic acquisitions that he's looking at? Barco Entertainment Division ($1B) or mayber just the Laser Projector Division ($200M) would be interesting ways to double down on the technical side of the business. Furthermore, maybe camera manufacturers would be a salient expense.
A large part of me believes Gelfond had no interest in rewarding shareholders until he sells this company and that he's more interested in building his empire (the size of the company and the size of his wallet).
As long as he enables Longs to be on the train, I'm all for it. $80M on a balance sheet withouth debt for a $2B company is an exciting thing.
Theoretically, it makes us even more so attractive from an acquisition perspective too....but, again, I don't see Gelfond going that route anytime soon anymore.
This is only a positive thing. THe thing is, if you value 20% 400 chinese screens at $80M ($1M each), that only puts the value of IMAX's total screens (incl. backlog) at $1.25B. So, the question is, did IMAX get full value for it's existing and future screens? On paper, the answer is likely no. However, I agree, having IMAX as a full-on chinese company makes IMAX an "insider" in china now. They may have been on the forefront of any international company in China, but that is far far away from being on the inside over there.
Interestingly, at home, this deal will put $80M on the balance sheet for a company that has ZERO debt. Like I said in my original post, what will Gelfond use this for? A share buy-back? A special one-time dividend? Further pocket lining? We'll see. $80M on a balance sheet is great, but it should be put to work. Debt is cheap.
I'm not sure yet what the exact terms of the deal are, but this MAY put the value of the existing 150 or is it 400 total planned screens between $400M and $1.1B. It'll be interesting to see how the market digests this tomorrow......all should be positive, I imagine, but the question is how much!?!?
Brad single-handedly killed this rally. Here, some people are on here suggesting that maybe IMAX is finally getting the respect it deserves, but the very same longs (including myself) are always forgetting about the ace up the sleeve ($6M cash-ins and such) with management. They will do everything they can to prosper themselves.
The way this company is arranged it's unsellable due to BRAD and GelFUND. The only exist strategy they have is like an abusive marriage.........'til death do us part.
That changes my opinion how exactly?
IMAX dropped 3% almost immediately of this news being posted to newsboards around the world via the MidEast times. The article was posted just over 2 hours ago....the drop happened right after that. Don't tell me that the market doesn't care about the continued pillaging going on. They do.
If BRAD firmly believed he could get less $$$ for his options in June, why would he have dumped them yesterday....and, accordingly, if the Board believes this, why should anyone in the free world buy today?
The issues is not the fact the exercised them. The issue is the fact that he had them in the first place. What value has Brad provided in the last 5 years to be reaping $6M (a sizeable chunk of IMAX profits) from shareholders?
Your exuberance, though not irrational, may be premature. Fellow longs know the ups and downs are very common and unwarranted, often both ways. I've always maintained that IMAX is a $50 or a $100 stock, but alas, as you said, it remains a thesis and nothing more. I have made my 50% (on paper), but that's not why I invested. My exit strategy had always been focused on 2015, when Avatar and Laser were in full swing....unfortunately, neither are happening (one confirmed, one unconfirmed). I will sit and wait, though.
I have underestimated the 2014 film slate. I thought Q1 would start off with a dud and I don't think that's the case.
You didn't even mention Home Theatre systems in Asia. I honestly think that that could be 20% of the revenue stream in 3 years.
Interestingly, the comments provided from Christopher Nolan were potentially even bigger than IMAX being pumped by JPM.
He said he had shot more on Imax than he has for any other movie and was preparing “really beautiful Imax prints that will be in certain key locations.” He added that the format could not be beaten in terms of resolution and, most intriguingly, said the presentation of his newest movie would be more crucial than at any other time in his career.
Nolan loves Imax and Imax loves Nolan. Warner Bros and Paramount, partners on Interstellar, are in his thrall, as are exhibitors. So what if Nolan were to advocate releasing Interstellar first in an exclusive Imax window? Who would deny one of cinema’s greatest visionaries and technicians?
The relatively low number of Imax screens in the US means it would be a fairly limited footprint – but imagine the word of mouth. After one week it would arrive in conventional theatres and crowds would be banging down the doors. That’s what Harvey Weinstein does with his platform releases, so why not make it a scalable business model?
Is it beyond everyone that between Revenues and Profits were flat between in 2013 vs. 2012? Is that worth $20M in compensation to a few top cheeses? We're not talking about Growth....we're talking about FLAT. And don't tell me 2012 was a better movie year. Statistically 2013 and 2012 were within 1% of each other in terms total North American Box Offices.
No Top End or Bottom End growth for a growth company?
Believe me, as I write this, I wonder why my largest holding in my portfolio is this company.
Laser, Home Theatres and Avatar (2016) seem like thin ice to me sometimes.
Ekave, taking out their money is no longer their right. The second they went public, the legal duty of that Board (and CEO) serving its shareholders FIRST, meaning above all else. That is actually the law. The point is, the second they went public was the moment when Gelfond legally should have started working for someone else. It's never happened. From GOld-plated pensions to dual CEO's (hello $50M!) It's not as if company insiders own 51% either. The Board is corrupt and incestuous. I don't deny that Gelfond has done wonders, but the Board is paying him as much as many CEO's of organizations 20-100 times larger in Market cap. The fact that Gelfond's annual compensation can be measured as a double-digit % of company profits is by any measure a friKgen farce.
Justice isn't for sale in China? Just checkin'. It's always about Gelfund....don't be confused.
I was reading through the annual SEC filings today. It actually says that "if anyone takes control of the company such that Gelfond doesn't directly control their compensation" then Directors are allowed to leave the company "with just cause" AND be entitled to a fat severance package. He and his cronies are dug in like ticks/chiggers and won't be moved by just a pedestrian-type takeout offer. This artificially increases the street PRICE of IMAX as a going concern, but does nothing to increase the VALUE of the company. I've never read this kind of wording in an SEC filing....amazing stuff.
I read the entire SEC filing cover to cover and there isn't a single sentence in the compensation section that doesn't give me the yips.
Shorts have their mandibles on this, man. Look over at Tesla. JPM raised the price target for Tesla and the friggin' stock price jumps 14%!!!!!!!! This is now a $30B venture that loses money. Bubble 2.0 is upon us....someone mentions the storage of energy using batteries (as if it's a new concept) and a company tacks on $5B in market cap. Seriously. Scary. Stuff.
I'm not as concerned with the selling as I am the rewarding!
Don't get me wrong, I cringe when I see Brian Bonnick selling every penny of his stock at
Here's the thing, if you're betting on this company right now, you're betting on 3 things:
1) James Cameron (and the rest of Hollywood) to keep pushing the envelope with Avatar-like hits that leverage IMAX's I.P. to create a truly unmatched theatre experience for the everyday moviegoer.
2) Laser Projection - Laser projection will be adopted by Institutional theatres first (maybe conventional theatres second) and the image quality and upgraded experience will bring people out to those theatres. Though this may be capital intensive, over the long-term this help reduce "DMR costs" and improve margins for the company and its institutional theatres.
3) Home/Private theatre installations leveraging the IMAX brand will take off in China and select Asian/Eurasian countries like wildfire. Note, this could potentially add 10's of millions of revenue per quarter. It's feasible that this leveraging of the IMAX brand could lead to the an evolution of the home theatre experience to something we've never seen before.....movie releases at day & date on a truly big screen in your mansion.
We're at a stage where we're now increasing installed screens at MAX 15-20% per year. There is no justification for this stock to continue climbing significantly WITHOUT the 3 factors mentioned above. That's how I see it.