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Happy Hunger Games! But Post-Katniss, Does Lions Gate Have Another Blockbuster Series in Its Back Pocket?

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Lions Gate continues its parabolic stock move as fever for 'The Hunger Games' gets just plain scary.

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Did you get your tickets for The Hunger Games yet?

Friday, March 23 marks the official release date for 2012's hottest film, and online-ticket vendor Fandango just reported that over 2,000 of the weekend's screenings have already sold out.

Oh, well, I'm sure you'll have no trouble finding a ticket for Disney's (DIS) John Carter if you're happy with seeing just anything, and besides, the house that Mickey built could really use the money.

And if you're really desperate you could try Craig's List:


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Lions Gate's (LGF) stock, now up 90% year-to-date, has been on the receiving end of a startingly large number of pumps this week -- everyone from CNBC's Jim Cramer to the Fast Money Crew to Bloomberg to the Wall Street analysts covering the stock have been getting behind the stock in a big way.

But as much as it pains me, I feel compelled -- no forced! -- to point out that we at Minyanville were way, way ahead of the crowd on this one. (see Amazon's Holiday Sales Update: 5 Things You Need to Know and 'Twilight' and 'The Hunger Games' Put the Odds in Lions Gate's Favor.)

Though technically, all thanks for this trade should go to my sister, who annoyed me to the point last year where it was easier to just read The Hunger Games trilogy than to continue hearing her talk about it.

Will Minyanville CEO Todd Harrison fire me and replace me with my sister? It could happen!

Now, we all know that The Hunger Games is going to have a huge opening this weekend, and in all likelihood, it's going to crush the $300 million number being thrown around for its ultimate box-office gross. For one, the trilogy's book sales have been incredible, likely well over the 25-million-unit mark at this point. And that doesn't include the seemingly prevelant pirating of the digital versions of the book.

As of now, The Hunger Games occupies the top four spots on Amazon's best-seller lists for both regular books and Kindle eBooks -- so people are still getting on board:


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In addition, the reviews are pretty incredible for this genre of film.

As of the time I'm writing this, RottenTomatoes.com is reporting that 90% of reviews are positive:


That 90% number beats out five of the seven Harry Potter films, including the original, and of course, completely decimates the Twilight series.

I suspect that come Monday morning, The Hunger Games will be the No. 1 topic of discussion at cafeteria tables across America, and that multiple viewings will be par for the course for an inordinate number of fans. Also, the excellent reviews and hefty dose of ultraviolence will help bring in nonfans of the books and boys/men.

So what do we do with Lions Gate stock after it's had the run of a lifetime in just a few short months'?

There's nothing wrong with taking profits here -- in fact, I've taken a bunch at lower prices.

However, I'm content to let my remaining common-stock position ride, and I'm also short a small number of put options.

There are two primary reasons I'm not taking it all off the table here.

As I discussed on February 24, manias can last a lot longer than may seem reasonable, and with the crowd seemingly expecting a "sell the news" reaction on Monday, I'm not sure it will actually happen. (See Lions Gate: Emerging Craze for 'The Hunger Games' Drives a Parabolic Stock Move.)

And more importantly, I've got two words for you: Chaos Walking -- a.k.a. the other dystopian sci-fi trilogy to which Lions Gate owns the movie rights.

I'm still early in my research here and not making an official call just yet, but I see a reasonably good chance that traders -- perhaps 1,000% irrationally -- will extrapolate the success of The Hunger Games to Chaos Walking.

So ladies and gentlemen, start your research engines now -- before Wall Street catches on!

Twitter: @MichaelComeau

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