It was big, but not big enough.
That’s Wall Street’s generally pessimistic reaction to the $101 million opening of “Hunger Games: Mockingjay — Part 2.” The final film in the science-fiction series dominated the weekend box office, but it fell short of tracking that suggested it would kick off its run with more than $120 million domestically. Its debut is the lowest among the four films in the series.
In response, shares of Lionsgate, the studio behind the film series, opened down more than 1% before battling back on Monday to recapture much of the declines. The stock price fell sharply on Friday, closing down 3% on news that the film was likely to fall short of predictions.
The company’s stock began falling on Nov. 12 after closing the day at $41.07. It had received a boost after news broke that media mogul John Malone had increased his stake in Lionsgate, prompting speculation that he might eventually try to merge it with one of his companies.
A stock swoon is not a new phenomenon for Lionsgate. Shares of the company dropped after “Mockingjay — Part 1” and “Catching Fire” fell short of estimates — somewhat ironic given that the latter represented a high-water mark for “Hunger Games” debuts.
There appeared to be something of a spillover effect from the weaker than anticipated box office results. Shares of exhibition chains such as Regal and AMC were down sharply on Monday.
Analysts were generally downbeat about the opening. Eric Wold of B. Riley and Company noted that he had predicted that “Mockingjay — Part 2” would make $375 million domestically. Given the weekend’s results, he now believes that the film might fall $100 million short of that estimate. While praising Lionsgate’s efforts to diversify by building its television business, he argued the opening of “Mockingjay – Part 2” will “raise questions about the ability of the studio to maintain/drive EBITDA once the franchise ends.”
Stifel Research’s Benjamin Mogil predicted that the softer than expected opening would take a bite out of “Mockingjay — Part 1’s” home entertainment revenue, lowering sales by 10%. He also notes that internationally, the film is not doing as well as its predecessors, something he blamed on currency weakness in Russia and the fallout from last week’s terrorist attacks in Paris.
Wunderlich Securities’ Matthew Harrigan quipped that the results were not exactly “dystopian,” but lowered his estimates for where the film would end up. He predicts it could be the first film in the series not to top $300 million stateside, ending its domestic run with $275 million.
“Commercially, it certainly made sense to break up the project into two parts,” he wrote, noting that the film should still generate $160 million in profits, even if that falls short of the $250 million that the first three films each earned on average.
Some stock watchers saw the decline in share value as an opportunity to buy, particularly with Malone ambling around on the periphery.
“We believe the stock weakness is overdone as Lionsgate has a solid slate of films in the next few years with several that have the ability to outperform expectations, as well as a smaller but growing television production business where we believe the company will continue to invest,” wrote Alexia Quadrani of J.P. Morgan.