Will this limited release report box office?

One of the frustrations that starbond traders have is when they are expecting a starbond to have a profitable adjust, only to have it not report box office to ERC.  (If you're not familiar with this issue, it is explained in this column).  Obviously it would be useful to know whether a movie is likely to report box office before you invest in the starbond. However, doing this research for every limited release is time consuming, tedious and easily forgotten.  After many years of doing nothing about it, I finally got fed up with being on the wrong side of starbond movements and decided to look systematically at the studios that do and do not report box office, and develop a reference to hold that information.

The new spreadsheet is called Will It Report?.  It has data on films that had a limited release starting in January 2015, the studio behind the release and whether box office was reported to ERC.  The studio behind the release is the same as that listed on the relevant moviestock page, except in cases where the moviestock page does not list a studio, and this information has been gained from another source. These studios are marked with an asterisk.

Will It Report? also analyses the data through a simple formula and suggests how reliable a particular studio is at reporting box office.  Because these predictions have not been tested and are probably not going to be 100% accurate, I've stolen pithy results from the Magic 8-Ball as the answers.

Like other HSXsanity tools such as the predictions database and the midnight box office database, I plan to continue updating Will It Report? for future releases.  Also like other HSXsanity spreadsheets I'll do my best to make it as accurate as I can, but errors happen, real life gets in the way and so on.

Not having looked at this issue in detail before, there were a couple of results that challenged my assumptions on which studios reported and which did not:

• Lionsgate - or rather, its subsidiaries and partners - are inconsistent about whether they report box office.  Movies released under the Pantelion label, which is aimed at Latino audiences and backed by Lionsgate - such as ALMAL, LVRBT and VATAP, which all had releases in 300 or more theatres - consistently report box office.  Other Lionsgate-related brands, such as  Grindstone Entertainment (a subsidiary) and Saban Films (a partner) have not reported box office.
• Weinstein reported box office for nine of its eleven limited releases. The two movies that did not report - EVRLY and MNST2 - were both released under the Radius-TWC brand, which specialises in VOD.
• Independent wings of major studios such as Focus Features, Fox Searchlight and Sony Pictures Classics reliably report box office, but major studios that want to bury movies (for example, Paramount and ARE51), or that decide to release a movie through their VOD brand (Sony/Stage 6 and PDSTN) are not.
• IFC Films is surprisingly spotty about reporting box office. My vague impression was that they reliably reported box office, but they reported on only 8 out of 17 films - generally the most successful ones.  MTCH was the only film to report with a theatre count in the single digits, and SALVT (box office of $42K) was the only film not to report with a total box office of over $20K.

There's clearly more work to be done in parsing out which movies are likely to report and which are not - though I'm not planning to get down in the weeds in this column.  But hopefully Will It Report? is a useful reference that you can use to flag possible starbond adjust issues when you're looking at other starbond tools such as kaigee.com,  the HSXDude's Post-Adjust Bond Show or even doing your own math.

Why is my starbond adjust prediction wrong?

There's a lot of money to be made from starbond adjusts, and it can be very worthwhile to do your own starbond calculations.  It's very easy to do starbond calculations quickly, and if you need advice you should check out this column and also this other column.

There are also a few starbond tools put together by other HSX players, including howprofitable.com, kaigee.com (which, at the time of writing, had not been updated in a while) and the hsxdude.com - specifically the Pre-Delist Adjust Show, the Post-Adjust Bond Show and the StarBond Tip of the Day columns that you can use to double-check your work.

Now, let's say you've done your starbond calculations, but they don't match what other people (or HSX) have calculated.  Where have you gone wrong?

Here are the steps you should go through to figure things out.

Check that you are using the right formula

For most starbonds, you calculate the next adjust by:

• taking the total box office for the starbond's four most recent movies
• adding your estimate for the delist price for the starbond's next movie, and
• dividing the result by five.

However, some starbonds are attached to fewer than five moviestocks.  For these starbonds, the TAG is calculated using a different formula, depending on how many movie credits the star has.

When a fourth movie is coming into the TAG, you take the total box office of the starbond's previous movies, add your delist estimate for the next movie and divide the total by four.

When a second or a third movie is coming into the TAG, it's the same process - take the total box office of the starbond's previous movies, add your delist estimate for the next movie, but this time divide by three.

Starbonds do not adjust in price for the first film in their TAG.

Check that you have the right movie coming into the TAG

Movies enter the TAG in order of when they delist.  But because movies are listed by release date on the starbond page, it's easy to assume they enter the TAG in this order too.

This mistake is most commonly made when a starbond adjusts for a wide release, but is also attached to a limited release that (a) opened before the wide release and (b) has not delisted yet.  So check the credits section of the relevant starbond page to see if 

Check that you have the right movie dropping out of the TAG

Even though movies enter the TAG in delist date order, they drop out of the TAG in release date order.  And if two or more more films share a release date, only one will get dropped from the TAG - the one with the lowest box office.

If you're unsure, check the credits section of the relevant starbond page.  The moviestocks that the starbond is attached to are sorted by date, and sub-sorted by box office, so they are in the same order as the "dropping out of the TAG" order.  Just look at the movie that is delisting, count five movies down the list and that is (almost always) the movie dropping out of the TAG.

I say almost always, because there is one cautionary note here - the "starbond attached to a limited release movie that hasn't delisted" issue mentioned above also applies here.  When counting down the list of movies on the starbond page to figure which movie is dropping out of the TAG, make sure you are only counting movies that have already delisted.

Check that not just one movie is coming into the TAG

Sometimes, a starbond is attached to two (or more) movies that delist on the same date.  When this happens, those movies come into the TAG, the same number of movies drop out and the starbond is adjusted to the new TAG in one step.

If you're expecting just one movie to come into the TAG, your calculations are wrong.  This is especially hard to catch when a starbond is attached to both a wide release and a limited release delisting on the same day.

There's no easy way around this, beyond looking at the list of moviestocks the starbond is attached to and then figuring out whether two or more share the same release date.  But double and triple adjusts are often mentioned on the Stars board when they are coming up.

Check that you're using the right box office figures

Starbond adjusts happen the day after a relevant moviestock delists, but that doesn't mean the box office used in calculating the TAG is frozen at that the movie's delist price.  Instead, the TAG will be updated in the weeks to come, based on updated box office figures - including box office earned after that movie has delisted.

So, don't even look at the delist price when calculating the TAG.  Use the actual box office figure - on the moviestock page, under "Gross", to get the right number.

The only exception here is that the box office figure used in starbond calculations is capped at $250 million.  So even if a movie has earned more than $250 million at the box office, it's not going to count as more than $250 in the TAG.


Going through these five steps should help you fix any problem you are having with calculating starbond adjusts.  But if things still aren't working out, there is absolutely no shame in posting your questions in the Stars board, especially if you show your math to help others see what the problem is.

What are some of the things that can make starbond adjusts difficult?

Calculating starbond adjusts is pretty simple - as described in this other column - but there are a few technicalities that can trip you up if you don't know what to look for.

This article will take you through all of these rules, which are also covered in the HSX Glossary and the HSX FAQ.

$250 million cap

Starbond prices are adjusted to reflect their Trailing Average Gross, or TAG.  Generally, the TAG is the average of the North American box office of the star's five most recent films, but this is not always the case.

For example, the box office for each movie used in calculating TAGs is capped at a maximum of $250 million.  So if a movie earns $400 million at the box office, that box office only counts as $250 million when calculating the TAG.

Here's an example of how this works.  A starbond has five movies in its TAG with the following box office amounts.

• Movie 1: $150 million
• Movie 2: $100 million
• Movie 3: $80 million
• Movie 4: $20 million
• Movie 5: $400 million

Totalling the box office:

$150 + $100 + $80 + $20 + $400 = $750 million

which would result in a TAG of $150 million.  However, Movie 5's box office of $400 million only counts as $250 million, so the box office used to calculate the TAG is:

$150 + $100 + $80 + $20 + $250 = $600 million

giving a TAG of $120 million.

For more information on why this rule exists, you can check out this column.

Fewer than five attachments

Many starbonds are attached to fewer than five moviestocks.  For these starbonds, the TAG is calculated using a different formula, depending on how many movie credits the star has.

For starbonds with four attachments:

the average box office of those four movies

For starbonds with three attachments:

the average box office of those three movies

For starbonds with two attachments:

the total box office for those two movies, divided by three

For starbonds with one attachment:

the box office for that movie, divided by three

Also, starbonds do not adjust in price for the first film in their TAG.

Two movies delisting on the same date

Sometimes, starbonds will be attached to two (or more) movies that are delisting on the same date.  When this happens, the TAG and the starbond price will be adjusted for all of these movies at the same time.

For starbonds with five attachments, for each new film coming into the TAG the oldest will be dropped.  So, if two movies delist on the same date, then the two oldest movies in the TAG will be dropped, and replaced by the two new movies.

This works slightly differently for starbonds with fewer than five attachments.  Sticking with the example of two movies entering the TAG on the same date, for starbonds with four attachments, the two movies will come into the TAG but only one will drop out - so the TAG is recalculated using the starbond's five most recent movie credits.  Similarly, for starbonds with three or fewer attachments, the two new movies will come into the TAG, but no moviestocks will drop out, and the TAG will be recalculated using the appropriate formula for the new number of attachments.

Two films in the TAG with the same release date

Movies drop out of the TAG in order of release date, but sometimes the two oldest movies in the TAG share the same release date.

When this happens, the film with the smallest box office gross will be dropped from the TAG first.

This is reflected on the individual starbond pages, which has a list of credits in the reverse order You can also verify this by checking the box office on the relevant moviestock pages.

Movies that do not report box office

Sometimes, a movie is released in theatres, but does not release box office information to ERC.  This is discussed in another column, but the implications for starbonds are that when this happens, any starbonds credited to the moviestock will be removed in the week before the moviestock's delist and will not adjust after the moviestock delists.

While this doesn't have a direct impact on the TAG, when a movie fails to report box office traders will be checking the starbonds attached to the relevant moviestock and looking forward to their next scheduled adjust.

When a movie doesn't report box office on its first week, there can be a good reason for not doing so, like a late release date change.  However, if the movie has not reported box office by its second weekend of release, it almost certainly won't for the remainder of its theatrical run.  So be prepared.

How can I calculate starbond adjusts quickly?

Starbonds are priced by how much their movies make at the box office, as measured by their Trailing Average Gross.

For most starbonds, the Trailing Average Gross is the average North American box office take of their five most recently-released movies.  Other, similar formulas apply to starbonds that are attached to fewer than five moviestocks, and you can check those formulas in the HSX Glossary under "Trailing Average Gross".

When a starbond is credited to a moviestock, and that moviestock delists from HSX, the TAG is recalculated and the following day, the starbond price will be adjusted in price to match the new TAG

Most starbond calculations are very simple, and you can easily do them in your head or on a piece of paper.  One way of making the calculation is by following these easy steps:

1. Subtract the gross of the movie dropping out of the TAG from the expected gross of the movie coming in.
2. Divide that number by five.
3. Add the result to the starbond's TAG to get the estimated adjust price.
4. Compare the estimated adjust price to the current price.
5. Invest (or not) accordingly.

Being able to calculate future adjusts like this means that you can respond more quickly to news and events that impact starbonds, like a sudden release date change or a movie opening way higher (or lower) than expectations.  The sooner you can react, the better you will be able to identify which starbonds are going to have the biggest price movements from news.

Not every starbond adjust is simple, and there are a few exceptions and technicalities which are discussed in another column.

Why is this security moving the wrong way when it's guaranteed to make a lot of money in a couple of days?

It can be frustrating when you are holding an investment that is a sure thing - like a moviestock approaching delist, or a starbond approaching adjust - but the market is moving the price in the opposite direction.  It seems not just counter-intuitive, but idiotic.  Why can't people be patient and cash out at the accepted time designated by the calendar?

The main reason this happens is that small, active traders are cashing in their gains and moving onto a more profitable investment.  As the price falls, this impacts other traders.  More small active traders will move their money into something more profitable in the short term, calculating that they can buy back into this opportunity later.  Other active traders will follow the movement and play the players.

There are two ways of coping with this.

The first is to follow the movement.  This offers higher gains, because hopefully you'll make money as the investment moves in the contrary direction, and then more money still.  There are two chief risks here - that the gains from flipping will not cover your costs in commission, and maybe the price will turn back in the "correct" direction when you're not expecting it and you'll miss the movement.

To mitigate the risks, you'll want to study how price swings work in practice.  Most price swings follow predictable patterns - or so the dark masters of the day-trading arts claim.  So study price swings, and observe how far prices move in the "opposite" direction, and figure out when the price movement switches back to the correct direction.  Once you're comfortable with how price swings work, you can also use limit orders to pre-position your trades according to your expectations.

The second is to accept that your investments aren't going to move in a straight line the way you want them to, and patiently wait for your guaranteed profits to roll in.  It's less rewarding, but you don't have to put any effort into it.

What happens if an actor with a starbond dies?

In the unfortunate event that an actor (or director) with a starbond dies, HSX will delist the starbond at its Trailing Average Gross (TAG).

Because a starbond's current price will often differ from its TAG, the starbond is halted immediately after HSX learns the news.  This is to prevent macabre traders profiting from a star's death.  So keep an eye on the news and get in quick!

There is one extremely rare exception to this - if an actor dies while a movie they appear in is in release, HSX may decide to wait until the starbond has adjusted for that movie, and then delist the starbond at the new TAG.  This is so traders who invested in the starbond to anticipate its next adjust are not disadvantaged.

Why does the $250M cap exist?

When they are used in calculating a starbond TAG, box office grosses are capped at $250 million - no matter how high the actual box office climbs above that mark.  This is to limit the amount of profit that traders can take from a single starbond investment.

A mega-grossing movie entering the TAG, or dropping out of it, has a huge impact on the TAG and therefore the starbond's price.  This provides a huge profit opportunity for traders, and because we all know what movies have grossed above $250 million in the past and which movies are likely (or unlikely) do so in the future, those profits are is essentially risk-free.  Too many risk-free investments are not good for HSX.

HSX's business model is to sell information gleaned from the trading of moviestocks.  The more moviestock trades, the better information HSX has to sell.  The more active traders dealing in moviestocks, the better for HSX.

Starbonds exist as a fun sideline for traders.  They provide some extra profits on the side, and some traders feel good about owning a particular starbond.  However, they don't provide much value to HSX.  It is moviestock trading that drives HSX's revenues, and its sustainability.

If traders have greater risk-free opportunities traders from starbonds, they will invest more $H in starbonds.  And the more H$ they invest in starbonds, the less H$ they will have to trade moviestocks.  And if less H$ is being used to trade moviestocks, the information that HSX sells becomes less valuable.

So that's why the cap exists.

When the cap was first introduced, there were fewer mega-grossing movies.  A decade ago, only four films grossed above $250 million, and only one of those broke $400 million.  This year, we've had four films go past $250, million with three of those grossing over $400 million, and there is still the last Twilight movie and the first Hobbit movie to come.

So we are having more movies breaking the $250 million mark and more movies earning way more than that.  If the $250 million cap were removed tomorrow, we would see starbond price changes of $60, $80 and even $100 becoming quite common, and carrying little trading risk.  Traders would park more money in long-term starbonds and trade moviestocks less.

This means that the $250M cap is not going to change any time soon, and arguments like "more movies are breaking the cap", "let the free market decide" and "it's not fair that these starbonds are priced less than their true value" aren't going to change anything.

What is ERC? What happens when a movie does not report to ERC?

ERC, or Exhibitor Relations Company, provides movie related data - including box office information - to its clients in the entertainment and media industries.  You can see this information on its website, and you can also follow ERC on Twitter and Facebook to get the latest information quicker.

HSX uses the box office information provided by ERC when cashing out moviestocks and their related derivatives such as calls, puts, opening warrants and blockbuster warrants.

Moviestocks are cashed out at the ratio of H$1 for every $1 million earned by the movie at the domestic (United States and Canada) box office, after their first four weekends of wide release, or their first twelve weekends of limited release.

If a movie does not report to ERC over its thetarical run, HSX can use alternative sources of box office information - such as Box Office Mojo - when cashing out the stock.  Alternative sources are only used if the movie has not reported to ERC.  If a movie has reported to ERC, and an alternative source reports a different box office figure, HSX will use the ERC figure when cashing out the moviestock.

If no source of box office information is available, then the moviestock will cash out at $0.01.

ERC's box office information is also used to calculate starbond TAGs and adjusts.  HSX updates the starbond TAGs each Monday based on the data provided by ERC.

When a movie does not report box office to ERC, any starbonds attached to the moviestock will be removed, and they will not adjust after the moviestock has cashed out.  This happens even if HSX cashes out the moviestock using non-ERC information.

What is droi?

droi stands for "daily return on investment". It's a concept that you should become familiar with if you plan to grow your portfolio quickly.

If you have a small or a medium-sized portfolio like most traders on HSX, you won't be able to invest in every moviestock and starbond.  Instead, you will have to prioritise based on which investments you think will be the most profitable.

You can do this by estimating droi, which is a calculation to determine how good an investment is based on your expectations, taking into account the length of time that you will .  The formula for calculating droi is:

(expected value / current value) ^ (1 / days until expected value is realised) - 1

The obvious flaw with droi is that you don't have a time machine, so you can't go forward to see what the relevant price will be in the future.  This means you have to estimate what your expected gains are.

Not many websites are brave enough to predict the box office of movies that are weeks, if not months or years away from release - boxoffice.com's long-range predictions page is the exception.  Other tools you can use include looking at the box office of comparable movies, and also the prices those moviestocks reached on HSX.

For starbond adjusts, it is easy to find HSX fansites that have done the work for you. kaigee.com estimates droi using the current price of the relevant moviestock to approximate the future starbond adjusts, and if your own expectations differ from the HSX price, you can always recalculate the starbond adjust using your own box office predictions on the individual starbond pages at the site.

Knowing a security's expected droi also gives you a clue about how to other players are trading securities.  A high droi indicates that traders will be investing heavily, and the price should move in the predicted direction.  A low droi should mean low trader interest, and a long-term decline in price.

droi isn't the final word on investing and trading, because without that time machine we will never have complete information about future prices.  Movies regularly exceed, or fall under box office expectations.  Release dates change.  Prices don't move in a straight line, but have daily swings.  But so long as you respect the qualifiers, droi is an essential tool for growing your port.

What's the deal with delisting old starbonds?

A starbond is eligible for delist if:

• it has been three years or more since its last adjust, and 
• the starbond is not attached to any active moviestocks.

Starbonds that are delisted by HSX cash out at their trailing average gross (TAG).  Because a starbond's current price will often differ from its TAG - especially for starbonds that have not adjusted in some time - this provides opportunities for profit.

Starbond delists generally happen twice a year, in batches.  Traders are not given advance notice of when they occur, and the delists are only noted on the calendar after they have occurred.  The delists usually happen on a Friday, making a nice surprise for the weekend.

The "three years without an adjust" rule is really a guideline, which has exceptions, including:

• director starbonds are generally given a while longer before becoming eligible for delist.  This is because directors on average have more time between projects than actors.
• actors who have been credited in moviestocks that delisted without reporting box office, or because they went straight to DVD, are also given a while longer before becoming eligible for delist. 

Also, if there is news that credits a starbond to an active moviestock, obviously that starbond is no longer eligible for delist.

Investing in potential starbond delists is speculative.  We have the guidelines, but no one knows for sure whether a starbond will actually be delisted in the next round of delists, or when the next round of delists will occur.  Speculating on starbond delists is really only for large ports that have no where better to put their cash.

To make the speculation easier, The HSX Dude and KaiGee both track potential starbond delists in the Bucket List sections of their websites.

The HSX Dude lists all of the starbonds eligible for delist, and has notes on when each starbond became eligible for delist, and whether there are any applicable exceptions.  The HSX Dude's Bucket List is updated every month.

KaiGee's list of the eligible starbonds also has their TAG and current price, so you can see at a glance which potential delists would be the most profitable.

Usually before starbond delists, HSX will do a review of potential delistees to check that they don't have any upcoming projects.  If you notice that several starbonds of the Bucket List are suddenly attached to moviestocks, it's a clue that another round of starbond delists may be happening shortly. Or it could be coincidence.

Starbonds are also delisted when the relevant actor or director passes away.  These starbonds are delisted at TAG, but their price is halted as soon as news breaks.  This is to prevent macabre traders from profiting from other people's deaths, so you'll have to trade quickly.

Why doesn't this actor have a starbond?

It's one of two reasons. Either:

• the actor has not landed enough lead roles in movies, or

• the actor has landed enough lead roles, but HSX hasn't gotten around to creating the starbond.

The general guideline is that an actor has to have both past and future lead roles in movies to be considered for a starbond.

Past lead roles are important because it means the actor is prominent enough to warrant a starbond, and it means that he or she has a box office history that can be used to calculate their trailing average gross (TAG).

Future lead roles are important because it means that the starbond will have at least one adjust in the near future.  There is little benefit to traders in having a new starbond that will not adjust any time soon.

A lead role doesn't have to be the "leading" role.  The love interest, the lead villain, and the comic relief are all examples of common lead roles.  And not every role on the actor's CV has to be a lead role, but the actor has to have at least one or two of them to be considered.

If HSX hasn't got around to creating a starbond for your favourite actor (or director), you can request new starbonds by emailing macdaddy at hsx.com.  Be sure to include a list of past and future credits, with links to any relevant publicity materials that credit the actor.

Starbond IPOs usually happen at the rate of one per week, and there is a waiting list that does not operate on a first come, first served basis.  This means, for example:

• an actor credited in a movie opening next month will generally get their starbond before an actor whose next movie opens next year. 

• an actor headlining a major studio release will generally get their starbond ahead of an actor headlining a small independent movie.

• an actor that people recognise - say, because of their role in a hit TV series - will get their starbond sooner than a character actor people recognise as "that actor from that movie, you know, the one with that other guy".

• an actor in a movie currently in release usually won't get a starbond until after that movie has delisted.

So if you do request a new starbond, be patient.

Why isn't this starbond attached to that moviestock?

The most likely reason is that the actor doesn't have an appearance in the movie that justifies attaching the starbond to the moviestock.

The other possible reason is that HSX hasn't gotten around to it yet.

HSX will attach a starbond to a moviestock when the relevant actor (or director) has a credited role in the movie.  Not every appearance in a movie is a credited role.

For HSX, a credited role means the actor is:

• listed in the main credits for the movie, or

• credited on publicity for the movie, such as trailers and posters, or

• credited in the production notes for the movie.

HSX will also attach a starbond to a moviestock when there is news that the relevant actor will appear in the movie, or is in talks/negotiations to do so.  This is done in anticipation that the role will be credited.

Starbonds will not be attached to moviestocks for:

• uncredited cameos in the movie, or

• cameos listed only in the closing credits of the movie (and not in the main credits), or

• actors being listed as part of the cast on IMDb's page for the movie.

Whether or not a starbond should be attached to a moviestock often becomes clearer in the weeks before a movie's release, and HSX may defer attaching some starbonds until after they have confirmed acting credits in the production notes for the movie.

If you do come across news or publicity that suggests a starbond should be attached to a moviestock, you can post your suggestion with a link to the evidence on the HSX Forums, on either the Stars board or the Feedback and Support board.