Thoughts on Marvel
As a financial editor/sector head at the Fool, I run across a lot of investment ideas from our writers. One of the more compelling ideas, at least for me, was Marvel. If you've ever read Tim Beyers' articles on our site, you know he's a big fan (and big shareholder...almost 18% of his portfolio!).
Tim's logic convinced me to buy some shares even after most of it's run-up...I believe I bought them at $33-something. Here are a few of my quick thoughts:
- With Iron Man (and now The Incredible Hulk), Marvel started producing their own movies...instead of getting licensing fees like they did for Spider-Man et al. The big question is how much more money will Marvel make now that they're taking on more of the risk?
- In a presentation Marvel did in 2006, it's apparent that the movies are around breakeven when they hit $100 million in domestic box office.
- I think the big question here is whether Marvel's catalog of characters will support a string of box office behemoths or whether the more minor characters just won't be compelling. I wasn't a big comic book guy at all growing up, so I have very little feel for this. I had never heard of Iron Man before the movie came out and thought the Hulk would do much better than Iron Man.
- Iron Man is nearing $300 million domestically and is poised to be a sequel producer on par with Spidey. That will certainly bode well for Marvel financially.
- The Incredible Hulk looks like it's just going to be a minor hit. It cleared $50 million domestically its first weekend, but Iron Man was around $100 million. If it has a similar trajectory to Iron Man, that means a total of around $150 million domestically by the end of its run. Not bad, but not the grand slam that investors like me were hoping for. But before we extrapolate too quickly, we'll have to see how much the dropoff is in week two.
- I like that Marvel is using talent like Jon Favreau, Robert Downey, Jr, and Ed Norton.
- I still haven't seen Iron Man or The Incredible Hulk. In fact, I chose to watch Don't Mess With the Zohan instead of the Hulk last weekend...I absolutely loved the Zohan...very funny stuff from Adam Sandler.
Check out some of Tim's articles, which do a much better job than my disjointed blog post:
Did the Hulk Bomb for Shareholders?
"Iron Man" Is So Much Bigger Than You Think
Marvel Is So Money