Horror sequel bow pumps shares
After pushing it to the top of the box office, “Saw II” helped Lions Gate to an 8% boost in its stock price Monday.
Jump was particularly significant as Lions Gate, like most media companies, has seen its stock fall substantially this year amid industrywide concerns over flattening DVD sales and a slumping box office.
Company’s net loss also widened substantially in the second quarter.
Before Monday’s jump, Lions Gate stock was down 16% in 2005. That’s a striking difference from 2004, when the indie studio’s shares more than doubled.
“Saw II” grossed an estimated $30.5 million over the weekend, making it the top opening in Lions Gate’s history and the biggest opener of the fall season.
Investors were not only impressed by the low-budget horror pic’s opening, but apparently confident it will do well on DVD and spawn more profitable sequels.
Studio also has done well this year with surprise hit “Diary of a Mad Black Woman” and the long-running “Crash,” but found weak results from “Lord of War,” “Waiting” and “The Devil’s Rejects.”
Lions Gate shares closed at $9.60 Monday, putting it down 10% for the year.