Travis Johnson

IMAX: Damaged Goods or Victim of An Industry Slowdown?

I don't think IMAX screens are a fad, they've shown they can draw significant crowds to even marginal movies for many years, and in my opinion the experience is signficantly differentiated from a standard theater to mean that they should perform better than the multiplexes, and that they stand up better than a standard movie does to the in-home competition -- but I can't argue that they have an awfully difficult debt load and clearly some management problems. As I said, I wouldn't advise anyone to buy shares in this one ... but a small piece of me thinks the downside is overdone.

IMAX Accounting and Legal Woes Make It a Sell

Philip, I love your conspiracy theory ... but would a pair of friendly Canadians do that? In all seriousness, I think Imax probably overshot and demanded either too much autonomy or too much money from investors -- if they really set the bar at $14 that was a significant reach.

But I think you're right, the company's worth much more than it's selling for today ... the only question is how long it will take for that worth to be realized. I think, truthfully, that even an $8 takeover would be a bargain for any acquirer, assuming that the lawsuits and accounting inquiries are as unimportant as they seem to me.

IMAX Plunge Presents a Buy Opportunity

I assume it's just more panicking over the lawsuits that are continually being filed, and the fact that they've changed CFO's probably adds flame to the fire. I decided to sell the part of my Imax holdings that were in a margin account since I can't justify borrowing money to hold these, but I still hold the shares that I bought at 6.20 after the bad news was released -- I could be wrong, but I think the accounting questions are largely unimportant and that the company's actual performance more than justifies a price of at least $9-10.

Again, I could be wrong -- I don't see any chicanery in their accounting dispute, and I think the class action lawsuits are the typical garbage that follows any bad news, but I'm neither an accountant nor a lawyer.

IMAX Plunge Presents a Buy Opportunity

All quite true -- and good reasons why Imax has been so volatile and hasn't been priced significantly higher. I tend to agree that there is still likely to be some sort of partnership or deal, albeit lower, but I certainly don't think the shares are well priced down here below $6.

Imax has plenty of warts, and I clearly was too optimistic in thinking that a 35% drop was as absurdly low as it would go ... but it also has solid earnings and good prospects for continuing installations and a great film slate, and I don't think the SEC inquiry is significant -- it might cause restatements and the movement of earnings from one quarter to another, but it appears that it's just a timing issue in recognizing revenue, so I don't really care. Imax is worth at least a market multiple, I think, and if they can make a partnership to help them ramp up the growth to meet demand, they might do much better than that.

That said, my short term record has been abysmal of late. I could be wildly wrong.

More Info on Potential Imax Takeover/Merger

I haven't dabbled in Imax options during this takeover season, but if I did I'd be tempted to do something quite similar -- hope it works out for you.