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The Oxen Group is a financial analysis and investment opportunities newsletter-based website run by financial analyst David Ristau and features several other traders. Ristau and team have been working in stocks for several years and has developed a knack for identifying winning short-term and... More
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  • The Daily Discourse: The Amazing Success of Pixar Films - Creating Dreams 0 comments
    Jun 15, 2010 1:14 PM | about stocks: DIS, PIXR

    Pixar Game - Name the following movie where this line appears (answers at the end of the article):

    A."You’ve got a friend in me"

    B. "It’s a bug-eat-bug world out there."

    C. "Hey there, Mr. Grumpy Gills. When life gets you down do you wanna know what you’ve gotta do?"

    D. "Hey, let’s play a game. It’s called "see who can be quiet the longest."

    E. "EVE!!!"


    Perhaps some of you were not as successful as that as some of the younger readers. Amazingly, Toy Story was released I was seven years old. It was a big hit in my household. I recently saw an amazing statistic on Business Insider about that every Pixar movie that has been released has been a Top Ten box-office hit on the year of its release. That is an amazing statistic that I do no think any other studio can claim. When I heard that statistic, I wanted to dig a bit more deeply into the company’s history and recipe for success.

    Pixar Studios began as a division of Lucasfilm in 1979 as the Graphics Group. The original company worked less on films and more on various animation techniques and parts of larger films. The Group’s big success was the Genesis Effect in the movie Star Trek II: The Wrath of Khan as well as the Stained Glass Knight in the Young Sherlock Holmesfilm. Steve Jobs came on the scene in 1986 and bought the Group for $5 million. The company soon changed the name to Pixar and worked mostly as a high-end hardware company that sold computers to the government and medical community. 

    In the late 80s, facing possible bankruptcy, Pixar began to do commercials for various companies’ commercials and was developing a relationship with Disney in a program for computer animation. Check out Pixar’s 1990 commercial for Listerine. Finally, in 1992, Pixar made a deal with Disney to produce three computer-animated films for only $26 million.Toy Story was the first grossing $350 million from 1995. The company made its first IPO in late 1995 for $22 per share on the Nasdaq with a listing of PIXR.

    From 1995 on, the company went on to make A Bug’s Life, which grossed $350 million as well in 1998. The companies went on to make Toy Story 2, Finding Nemo, The Incredibles, and Cars. In 2006, Disney bought out PIxar for $7.4 billion. The company had grossed nearly $3.5 billion by the time it was bought out. Since being bought out, the company has produced Ratatouille, Wall-E, and Up. Thus far, Pixar has racked up 24 Oscars, six Golden Globes, and three Grammies. 

    So, how has Pixar made such successful films? For one, they have had the Disney name behind their creations. The Pixar films are nearly as much Disney films as much their own, but in the same timeframe from 1995 to 2009, Disney has released only four movies that grossed more than $200 million: the three Pirates of the Caribbean series and the Chronicles of Narnia. This is despite releasing some 200 movies during that period.

    There is a Pixar success for sure. So, what makes Pixar’s success?

    Pixar’s John Lasseter says its quality. They only make one movie every year or every other year, while another company makes five or six and grosses nearly as much. It is, therefore, a matter of producing one great film a year or a handful of so-so to good films. Pixar has chosen the prior, and for that reason, have become such a success.

    This quote from Lasseter is great:

    One of the key things we do is we get comments, but from other filmmakers. Our creative brain trust is our own minds. So we know that we’re getting a reaction that comes out of total support, not ego. We have a rule: No note is mandatory, which allows you to be more open to criticism. We only use the notes that help us step back and look at the film through fresh eyes.

    Pixar is a dream machine. Period.

    They make fantastical movies about heroic characters come to the life with vibrant animation. They take the story linesthat cannot be done in reality and make them come to life: from toys to fish to bugs to rats to robots. The art of personification is on what Pixar thrives. They give normal human stories to fantastical characters and make you love them. There is not a touch of there films that is not nearly perfect - from the animation, to the voices, to the jokes, to the music.

    Pixar’s next film is Toy Story 3 - releasing this Friday should shine again. While it will not be as successful as the prior Toy Story films in creating an original idea, the creation of another success story is still on the way. On the plate for Pixar into the future. In the future, next year, the company will release Cars II. In 2012, the company will release a new story about bears - Brave.

    Since buying Pixar in 2006, Disney’s share price has increased from $25 to its current $35 per share. You can invest in Pixar by picking up shares of DIS!

    Good Investing,

    David Ristau


    (A - Toy Story, B - Bug’s Life, C - Finding Nemo, D - Up, E - Wall-E)

    Disclosure: none
    Themes: movies, animation, disney, pixar Stocks: DIS, PIXR
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