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Lions Gate smacked by mixed reviews on Divergent

  • Shares of Lions Gate (LGF -4.5%) are tracking lower as the studio preps for Friday's U.S. release of Divergent.
  • Though advance sales for the movie at Fandango are stellar, early reviews are mixed.
  • Variety takes the sharpest cuts at the film saying Divergent’s "uncertain sense of setting, bloated plot, drab visual style and solid yet underwhelming lead" could leave demand for sequels muted.
  • Box office forecasts see Divergent bringing in $65M-$70M this weekend.
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Comments (22)
  • Matthew Davis
    , contributor
    Comments (4377) | Send Message
     
    Not all teen apocalypse books are created equal.

     

    I think LGF is now stuck on 'one girl to change the world' movies and makes me believe they just got lucky with 'Hunger Games'. One trick pony now.
    19 Mar 2014, 01:05 PM Reply Like
  • lynnie5
    , contributor
    Comments (20) | Send Message
     
    I think your terribly wrong. This movie will be a big hit just like the hunger games. And even if it isn't did you see the line up for the nest coming movies. If not you better check it out!!! Steller!!!!!!!!!
    19 Mar 2014, 01:28 PM Reply Like
  • The Ottoman
    , contributor
    Comments (6) | Send Message
     
    If they got lucky with the Hunger games. How do you explain Twilight series? They have gotten lucky twice? They were able to pull 4 movies from Twilight and are pulling 4 movies from Hunger games. They must be doing something right because they were not one-time-hit.

     

    There are many teenagers out there with elevated hormone levels. Somebody needs to supply them with this genre.

     

    By the way please check the initial critic reviews for Twilight it received 49% at rotten tomatoes. From one critic "I've had mosquito bites that were more passionate than this undead, unrequited, and altogether unfun pseudo-romantic riff on Romeo and Juliet."
    19 Mar 2014, 01:39 PM Reply Like
  • DonaldSkipper
    , contributor
    Comments (28) | Send Message
     
    "Twilight" was a distribution only deal for Summit before it was acquired by LGF. It delivered well less than 50% of the income of "The Hunger Games" franchise films on a per film basis. You have to believe that LGF can consistently deliver PRODUCTION franchises at "The Hunger Games" level income for the next 18 years to get to its current P/E ratio. This is irrational given the reality that LGF has only delivered one production franchise at "The Hunger Games" level in the last 19 years.

     

    LGF is benefiting from theater chain P/E multiples on a business model that is not predictably replicable over the long term.
    19 Mar 2014, 01:50 PM Reply Like
  • GlobalK
    , contributor
    Comments (8) | Send Message
     
    They've had both Twilight and Hunger Games. Twilight could not have gotten much better of a critical reception than Divergent, and its films performed exceptionally. I personally do not believe the success of these movies is driven by critical response.
    19 Mar 2014, 02:42 PM Reply Like
  • billeebong
    , contributor
    Comments (178) | Send Message
     
    @Matt...spoken like someone without a teenager in the household...
    20 Mar 2014, 03:11 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (4377) | Send Message
     
    This is true, nice observation. I am boo-boo on this one though, trailers have been out for over a year, which means it was delayed for some reason, and, it comes out in a dull part of the season. Most films that are any good are reserved for May. This time schedule suggests is a dud.
    20 Mar 2014, 10:25 AM Reply Like
  • DonaldSkipper
    , contributor
    Comments (28) | Send Message
     
    70%+ of LGF's current $4 billion+ market cap is related to the ONLY major franchise PRODUCTION success in its 19 year history. That franchise expires in 2016. Why does any rational mind invest in an 18x+ P/E multiple for this company?
    19 Mar 2014, 01:39 PM Reply Like
  • billeebong
    , contributor
    Comments (178) | Send Message
     
    @Donald...the same people who go for the 60+P/E for TSLA...
    20 Mar 2014, 03:12 AM Reply Like
  • OPie415
    , contributor
    Comments (171) | Send Message
     
    Not sure what to think, but the promo's have that certain Ender's Game quality to them. They come across a little corny to me. I hope the movie does well. I sold @ 30.5 (from 16), bummed when it shot up, but I feel better now. I'm wondering what a good entry point will be, if any. I can honestly see it going down to 25 if it doesn't hit the numbers that they are hoping for.
    19 Mar 2014, 01:47 PM Reply Like
  • Bosco_pcs
    , contributor
    Comments (87) | Send Message
     
    since when do teenagers read Variety?
    19 Mar 2014, 02:38 PM Reply Like
  • dvdsom
    , contributor
    Comment (1) | Send Message
     
    I agree with lynnie5 - LGF is not a one trick pony at all - they are deep and small - not Disney that can blow $250 million on the Lone Ranger and not feel it. They prospectively protect their investments very carefully and have a terrific line-up that extends way past HG and Divergent. Forget Tyler Perry and Jigsaw - this is a different company - Orange is the New Black and Green is the Color of Money at LGF. hahaha
    19 Mar 2014, 02:42 PM Reply Like
  • MacAttack699
    , contributor
    Comments (7) | Send Message
     
    It's better than Enders Game, what a snooze fest. But I hope it blows up big or I may be looking for work next week.
    19 Mar 2014, 02:42 PM Reply Like
  • netflixlong
    , contributor
    Comments (28) | Send Message
     
    You'll probably be looking for work either way.
    19 Mar 2014, 04:47 PM Reply Like
  • jotenn
    , contributor
    Comments (157) | Send Message
     
    Rotten Tomatoes also indicates that 96% of its users want to see "Divergent". That is by far the highest percentage of any upcoming movie for the next week. Moreover, although the critics have generally panned the movie, "Entertainment Weekly's" top critic (Owen Gleiberman) gives it a B+ and a glowing review. But all this is just speculation on the movie's success. Only the YA's will determine that, and they have been known to be pretty independent on their views. Given the selloff, I am buying calls that bet the film will surprise on the upside.
    19 Mar 2014, 03:07 PM Reply Like
  • netflixlong
    , contributor
    Comments (28) | Send Message
     
    Excellent post. I bought straight LGF stock earlier today-before Yellen and subsequently too early- but your observations seem more relevant than anything.
    19 Mar 2014, 04:48 PM Reply Like
  • dannyusf
    , contributor
    Comments (44) | Send Message
     
    Every girl at my University is talking about it. Please go watch this!
    19 Mar 2014, 03:39 PM Reply Like
  • netflixlong
    , contributor
    Comments (28) | Send Message
     
    THX for the tip.
    19 Mar 2014, 04:48 PM Reply Like
  • deercreekvols
    , contributor
    Comments (6856) | Send Message
     
    Stellar ticket sales...mixed reviews...and (LGF) is "smacked"?

     

    As a shareholder of (LGF) I can only laugh at such nonsense. Analysts have been so wrong on this company and are completely out of touch with the crowds who will be buying tickets to Divergent. HS students are reading the books that LGF is making into movies. They are reading them and going to the movies.

     

    Not too difficult to see that the teenage crowd doesn't give two hoots about reviews. Look at the movies that make money! They are not critically acclaimed for the most part.

     

    Buying more (LGF) on the dip. Thank you to those who "smacked" this company.
    19 Mar 2014, 04:22 PM Reply Like
  • lynnie5
    , contributor
    Comments (20) | Send Message
     
    Take a look at just some of the movies that are coming up by LGF. divergent, In Secret, Frankie & Alice, Joe, Draft Day, The Quiet One, The Expendables, just to name a few. With best actors staring in all of them. LGF will only go up in their stock price. Go to their web page and check it out for yourself. Lionsgate is going no soon but up. And to you negative nannys, to base a movie company on just a few "as you call it teenage movies" is just plain ridiculous! And also I am NOT a teenager and I for one LOVED the hunger games along with the other 8 people I went with whom were all in their 50's.
    19 Mar 2014, 05:11 PM Reply Like
  • eenk
    , contributor
    Comments (426) | Send Message
     
    Lion's Gate has an amazing movie library, television production (Mad Men, Orange is the New Black, which becomes ongoing revenue, unlike films). And a variety of franchises: Saw, Tyler Perry, Expendables, Hunger Games, Twilight, Now You See Me, and potentially Divergent. Doubtful they'll remain an independent company within 5 years for the film library alone.

     

    From Yahoo Finance:

     

    *****
    The company derives nearly 40% of its revenue from electronic delivery of its content, versus the industry average of 30%. Netflix's highly acclaimed TV series "Orange Is the New Black," for example, was produced by Lions Gate. The company's home entertainment segment represents a greater percentage of total sales than its movie production business (23%) and its TV show development studio (12%).

     

    Lions Gate has both produced and acquired movies and shows, and now owns 15,000 titles, which it can exploit through several distribution platforms. One example: A 31% stake in premium movie channel Epix is a leading acquirer of Lions Gate's film library. A joint venture with Mexico's Televisa is helping Lions Gate become a leading content provider for the fast-growing Hispanic market.
    *****

     

    The company may have its ups and downs and may be fairly valued around $30, but it's a lot more than a one trick pony.
    19 Mar 2014, 06:53 PM Reply Like
  • srenfer
    , contributor
    Comments (7) | Send Message
     
    Hey Variety, I could care less if the movie has a bloated plot and an underwhelming lead because a ton of tickets will be sold. Remember Jennifer Lawrence, she is a Hollywood star and a Lionsgate find. I would expect the same for Divergent. Waaayyyyy to early for the boo birds to come out and I see it as a huge buying opportunity. I actually thought The Hunger Games trilogy was poorly written and actually enjoyed reading Divergent and bought the next two hardcover books to read. The quality movies today are few and far between leaving consumers begging for a box office success. Can't wait to see LGF 18 months from now when such a small studio can compete with the big boys.
    19 Mar 2014, 09:43 PM Reply Like
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