'Avatar' Ticket Sales Send IMAX Stock Soaring

As Avatar continues to do unprecedented business in IMAX theaters, Wall Street has taken notice. In mid-July the company's stock was trading at $7.30 a share, and in the past month, IMAX has jumped up from $10.67 to $13.78 per share. On Wednesday, the stock increased in value by over 75 cents. These things are all related, and analyst James March of Piper Jaffray has said the future is even brighter for IMAX, thanks to what the company perceives as an even more advantageous schedule of films in the coming year.

"Our checks indicate IMAX may have garnered 10%+ share of Avatar's opening weekend global box office despite playing on less than 2% of screens. While the domestic opening was at the low end of studio estimates due largely to inclement weather in the Northeast US, IMAX managed to sell out every show. International receipts were robust. We maintain our Overweight rating as we believe the strong Avatar attendance share highlights the power of IMAX's growing theatre network and the potential for the strong 2010 film slate."

What that means in layman's terms is that the stock will continue to do well for another year, although you probably missed your best chance to buy. But this is a great sign for the industry, which has run afoul of the stock market in the past couple of years, especially some of the major studios.

Comments

[Krystal]

Maybe be careful about buying any stocks/bonds at this time because some of the financial blogs/people I follow are warning about another possible major economic downturn in 2010. Hope it's not true.