RealD, Inc. (NYSE:RLD)

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Player Avatar TMFDeej (99.41) Submitted: 7/27/2010 6:59:11 AM : Underperform Start Price: $18.70 RLD Score: -44.17

This money-losing company recently made its IPO.Am I the only one who finds 3D movies annoying? Sure, it's a fun novelty once in a while, but the stuff makes me feel sick and I really don't feel like paying extra for it.Deej

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Member Avatar TMFDeej (99.41) Submitted: 8/1/2010 1:25:54 PM
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Like most of the people in the U.S., when the current fad of introducing movies in 3D started I got swept up in it, went to see several 3D movies, and thought that they were cool. Perhaps it was nostalgia that sucked me in, thinking back to my youth when we picked up paper 3D glasses at 7-11 and watched a couple of cheesy 3D horror flicks on broadcast television.

Last year I saw a couple of movies in the theater with my older son in three dimensions, including Ice Age: Dawn of the Dinosaurs and Up!. As time wore on though, I tired of watching movies in 3D. The last 3D movie that I saw was the new Clash of the Titans. Not only was the movie not great, but the 3D aspect really didn't add anything to it...other than several dollars to the price of each ticket. I missed the huge blockbuster movie Avatar in the theaters, so I decided to watch it on Pay Per View in HD instead. I have to tell you, I didn't miss the 3D one bit.

To be honest with you, watching movies in 3D with the glasses actually makes me feel sort of sick after a while. It certainly is less relaxing than vegging out to a normal movie. Consumers Reports recently reported on this very subject in an article titled Having trouble seeing 3D?.

I have taken both of my sons to see a couple of new movies recently, including Toy Story 3 and Despicable Me. Despite the fact that both were offered in 3D, we went to their old-school 2D showings. I wasn't just that I had my doubts about whether my two year-old would be willing to keep the 3D glasses on the entire time, I just don't enjoy 3D movies...certainly not enough to justify paying several dollars more a piece for four tickets to see one.

I came across several articles on the subject today.

Hollywood fears the 3D bubble has already burst

Like RealD's Stock Price, 3-D Movies Face a Bumpy Ride

Why 3-D is already dying

Here's what a recent article in the UK's Daily Telegraph has to say on the subject:

The proportion of cinema-goers who opt to see new films in their 3D versions has fallen steadily over recent months, with more opting instead to watch them in the traditional - and cheaper - format.

When Avatar came out in December, 71 per cent of Americans who went to see it on opening weekend - often the peak moment for a new release - opted for a cinema showing the 3D version. In March, when the animated fantasy How to Train Your Dragon was released, 68 per cent of the audience chose to see the film that way.

But by May that figure for Shrek Forever After was down to 61 per cent. At the beginning of this month only 56 per cent saw The Last Airbender in 3D, and a week later the proportion fell even lower, to 45 per cent, for the newly-released animation Despicable Me.

The figures have provoked an anxious debate within the film industry, which had previously hatched plans to convert popular films on its backlist - everything from the Star Wars trilogy, to Harry Potter, to the college pranks of Jackass - into the cinematic style du jour. Studios are already working on at least 24 brand new films in the expensive format for release next year. Now some fear that the "3D bubble" has already burst.

Capitalizing on the recent euphoria surrounding 3D, a company called RealD (RLD) went public last week. The company is the market leader in installing its 3D screens in movie theaters. Despite its sector-leading market share, over rivals such as Dolby, IMAX, MasterImage, and Xpand, RealD has yet to turn a profit. I suppose the logic is, become the market leader by installing as many screens as possible, as quickly as possible and worry about turning a profit later. Its revenues have been growing at a tremendous pace, but I suspect that its revenue growth lose steam more quickly than many people think. Plus RLD is already trading at something like 3.5 to 4 times sales, which is pretty rich. The company will report earnings on August 2nd, so we'll get a closer look at how things are going for the industry then.

Perhaps I'm jumping off of the 3D bandwagon too early and it will end up being a disruptive technology like cell phones, or color television once were. Time will tell, but my disenchantment with 3D caused me to short the shares of the recent IPO RLD today at $18.70/share.

I have a feeling that it's not just me who feels this way about 3D. Does anyone else out there agree with me? I'd love to hear others' thoughts on 3D movies in general or specifically about RealD.

Deej

Member Avatar lh100 (29.09) Submitted: 8/4/2010 10:01:48 AM
Recs: 0

Interesting points. I just read an article on Seeking Alpha, was interesting to see two different opinions.

http://seekingalpha.com/article/218334-will-3-d-encounter-resistance?

I agree with you about the 3D movies, they are unconfortable to watch after a while. I have only seen 2 movies(Avatar and Alice in Wonderland) however. One i liked, the other was so-so (then again, i did not go see Alice in Wonderland willingly..)

From what i understand, 3D is such a big hype that producers are opting for the "cheap" version of 3D, which is what we see in recent movies released in 3D like Clash of the Titans. According to James Cameron, Avatar was made for 3D, while Clash of the Titans was converted in 8 weeks in 3D. I have not seen the movie, so i can't say if the difference is really that big, but i think cheap 3D will really kill the hype if it's not that great.

Like you said, movie tickets are expensive, and 3D movie tickets is worse. However, i think TV in 3D is very much possible, especially for special events (Superbowl, World Cup, playoffs etc), sports, and any action program. Like it was mentionned in the article, i think 3D was not made for all movies, and that is fine too.

Perhaps some are looking at 3D as the new HD, but i do not believe that will ever be the case. In that perspective, maybe IMAX,RLD and others are overvalued as growth will certainly not be met. But unlike IMAX, RLD is open to go on TVs, video games etc., which gives it a bit more room for growth. With pirating, the price of movie tickets etc., going to the movies is in my opinion in a downtrend, and while it will always stay alive, i don't think it can grow that much. 3D might be a temporary boost for theaters, but i don't think it will bring that much more customers once 3D TVs are priced lower and more content is done for 3D TV.

I am biased here, as i am long on Sensio technologies. (SIO.V, canadian venture market)

They mainly own a patent to distribute 3D signal on existing 2D broadcast network while keeping the quality of the image to a maximum. Highly speculative play, i am hoping for a buyout and that they turn profitable in 2011.

Member Avatar lh100 (29.09) Submitted: 8/4/2010 10:02:31 AM
Recs: 0

Interesting points. I just read an article on Seeking Alpha, was interesting to see two different opinions.

http://seekingalpha.com/article/218334-will-3-d-encounter-resistance?

I agree with you about the 3D movies, they are unconfortable to watch after a while. I have only seen 2 movies(Avatar and Alice in Wonderland) however. One i liked, the other was so-so (then again, i did not go see Alice in Wonderland willingly..)

From what i understand, 3D is such a big hype that producers are opting for the "cheap" version of 3D, which is what we see in recent movies released in 3D like Clash of the Titans. According to James Cameron, Avatar was made for 3D, while Clash of the Titans was converted in 8 weeks in 3D. I have not seen the movie, so i can't say if the difference is really that big, but i think cheap 3D will really kill the hype if it's not that great.

Like you said, movie tickets are expensive, and 3D movie tickets is worse. However, i think TV in 3D is very much possible, especially for special events (Superbowl, World Cup, playoffs etc), sports, and any action program. Like it was mentionned in the article, i think 3D was not made for all movies, and that is fine too.

Perhaps some are looking at 3D as the new HD, but i do not believe that will ever be the case. In that perspective, maybe IMAX,RLD and others are overvalued as growth will certainly not be met. But unlike IMAX, RLD is open to go on TVs, video games etc., which gives it a bit more room for growth. With pirating, the price of movie tickets etc., going to the movies is in my opinion in a downtrend, and while it will always stay alive, i don't think it can grow that much. 3D might be a temporary boost for theaters, but i don't think it will bring that much more customers once 3D TVs are priced lower and more content is done for 3D TV.

I am biased here, as i am long on Sensio technologies. (SIO.V, canadian venture market)

They mainly own a patent to distribute 3D signal on existing 2D broadcast network while keeping the quality of the image to a maximum. Highly speculative play, i am hoping for a buyout and that they turn profitable in 2011.

Member Avatar cadunce (57.26) Submitted: 8/19/2010 5:47:08 PM
Recs: 0

For an investment, it really doesn't matter what you think. Honestly, it doesn't. So saying that a company sucks because you don't like 3D is silly. If you base your investments on such arbitrary things, you are sure to lose big.

Member Avatar TMFDeej (99.41) Submitted: 8/20/2010 8:59:33 PM
Recs: 0

I guess we'll see won't we. There's a big difference between 3D going away and this over-priced IPO not doing well.

Member Avatar Br0oklyn (< 20) Submitted: 8/9/2011 12:35:32 AM
Recs: 0

How's It Going Fool's, Brooklyn Here.

As a Business Prospective RLD / 3D Technology Is a Great Investment Idea. Why So? Although The Technology Isn't What The Experience Is At The Actual Movie Theater At Some Point In Time It Will Be. I Currently Own a Sony 55'' 3D Ready Tv, So Far So Good. I Know Some People May Have Motion Sickness Or May Complain About The Picture Quality But Guys This Is Fairly New Technology. The Room For Growth On This Asset Is Unthinkable, Wait And See When Cellular Phones Are 3D Enabled Imagine Your Family Member,Friends Co Workers Right On Your Mobile Phone In Full 3D-HD. Every Kid On The Block Will Want One!!. In My Own Personal Opinion 3D Tech Will Be The Next Boom. Watch Wait And See, If You Miss Out It Isn't Any Body Fault But Yours FOOL ! - Brooklyn® ?

Member Avatar OklaBoston (68.85) Submitted: 4/3/2012 11:25:18 PM
Recs: 0

Whether or not I care for 3D movies isn't really relevant. Some people will like them and the insiders are putting their own money up on the open market. Insider buying does a lot to reduce my skepticism in any stock. Insiders are seldom swayed by broker-sponsored publicity.

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