Sony claims that these glasses can cost studios $5 to $10 million per blockbuster release.  The move is expected to come on May 1, 2012, right before the summer film rush that usually has many 3D movie options.  MIB III and another Spider Man are coming in 2012.

What is amazing is that it was just yesterday that Merriman Capital outlined buyout speculation regarding RealD.  Talk about bad timing.  

The report in question from Tuesday also notes that exhibitors (theaters) are not going to react well (duh!) and it also noted that many other studios are likely considering a similar move.  The estimate is that these glasses can cost up to $0.50 per film.

News Corp. (NASDAQ: NWS) has reportedly tried to pass this cost on to exhibitors but that was fought hard.  With Avatar, that could have been one major cost.  And what about the on-again off-again reports of the Star Wars episode(s) being recut for 3D? 

IMAX Corporation (NASDAQ: IMAX) also runs many of the popular blockbuster 3-D films.  Regal Entertainment Group (NYSE: RGC) is down over 3% at $12.28.  Cinemark Holdings Inc. (NYSE: CNK) us down 2% at $19.32.

Oddly enough, DreamWorks Animation SKG Inc. (NYSE: DWA) is up 0.4% today at $19.53.

RealD Inc. (NYSE: RLD) is down 15% at $10.38 today and shares appear to have hit a new post-IPO low of $8.89 earlier this morning as the panic grew that 3D films might be taking a hit.  Unfortunately for RealD, its entire business model revolves around the proliferation of 3D films.  Live by the sword, die by the sword.

As a reminder, there is no assurance that this move will actually stick.  Some international markets already charge for this.

JON C. OGG

The Active Network, Inc. (NYSE: ACTV) Started as Buy at BofA/ML; Started as Buy at Citigroup.
AU Optronics Corp. (NYSE: AUO) Cut to Neutral at Goldman Sachs.
Blackboard Inc. (NASDAQ: BBBB) dropped from Underperform at BofA/ML; Cut to Neutral at JPMorgan.
Cinemark Holdings Inc. (NYSE: CNK) Cut to Neutral at Janney.
Clearwire Corporation (NASDAQ: CLWR) Raised to Outperform with $6 target at Credit Suisse.
Cliffs Natural Resources (NYSE: CLF) Reinstated Buy with $118 target at BofA/ML.
Discover Financial Services (NYSE: DFS) named as Bull of the Day at Zacks.
Eastman Kodak Co. (NYSE: EK) Reiterated Hold at Argus.
Freescale Semiconductor Inc. (NYSE: FSL) Started as Buy at Citigroup; Started as Outperform at Credit Suisse.
General Mills, Inc. (NYSE: GIS) Cut to Neutral at Credit Suisse.
Masco Corporation (NYSE: MAS) Maintained Underperform as Bear of the Day at Zacks.
Regal Entertainment Group (NYSE: RGC) Cut to Sell at Janney Capital.
SanDisk Corporation (NASDAQ: SNDK) Raised to Buy at Deutsche Bank.
Starbucks Corporation (NASDAQ: SBUX) Reiterated Buy but raised target to $45 at Argus.
Under Armour, Inc. (NYSE: UA) Called out as “Overvalued” in the weekend Barron’s.
WellCare Health Plans, Inc. (NYSE: WCG) called top Value at Zacks.
Yandex N. V. (NASDAQ: YNDX) Started as Overweight at Morgan Stanley; Started as Neutral at Goldman Sachs.

You are invited to join our free daily email distribution list to hear more about analyst upgrades and downgrades, top day trader and active trader alerts, dividend trends, news on Buffett and other investment gurus, IPOs, secondary offerings, private equity, and more.

JON C. OGG

Private equity tried to unload stakes in 2010 with mixed results.  Now that the capital gains tax and dividend tax rates have been extended for another two years,  there is a 24 month period with some breathing room.  We are also seeing many great venture capital-backed deals coming to market.

Below are the IPOs to watch:

1. AMC Entertainment Inc.

AMC operates 382 theaters with a total of 5,342 screens of July 1, 2010.  It generates roughly $2.7 billion in revenues and earned about $71 million in the last fiscal year.  Owners include J.P. Morgan Partners, Apollo, Bain Capital and The Carlyle Group. AMC  claims a pro forma average U.S. ticket price of $8.39 for fiscal 2010 versus $7.64 for the industry during the 12-month period ending March 31, 2010.  Its exposure to 3D and IMAX formats has also helped it maintain market share.  Its two top public competitors are Cinemark Holdings Inc. (NYSE: CNK), worth $2 billion, and Regal Entertainment Group (NYSE: RGC), worth $1.87 billion.

2. Carbonite

Carbonite, the online storage backup for consumers and businesses, has raised roughly $67 million in various venture rounds, while its sales have doubled each year since its launch in 2006.  The company claims to have backed up some 80 billion files, with more than 150 million new files backed up daily. It also claims to have restored more than 7.2 billion files that would have been otherwise lost forever.  Inc. Magazine placed it as #9 on its Inc. 500 list for 2010 of the 500 fastest growing private companies.  With “the cloud” remaining a hot topic and with its annual basic plan starting at less than $55.00 a year, Carbonite should have a solid reception when it comes to market.

3. Chrysler

Chrysler is the well-known distant number three of The Big Three.  The company was bailed by U.S  taxpayers, emerging from bankruptcy in mid-2010 under the operating control of Italian car maker Fiat.  After a solid General Motors (NYSE: GM) IPO and after a solid profitable turnaround at Ford Motor Co. (NYSE: F), an IPO filing in the coming months seems highly likely.  Even if the company wanted to stay under the Uncle Sam’s bailout umbrella for another year, the government seems to have been more keen on rapidly selling off its stakes in bailed-out companies. Fiat owns close to 25% and can increase its ownership to about 35% after certain performance hurdles. If it pays back the U.S. government for the bailout it can take as much as a 51% stake.  It projects $1.6 billion to $2.4 billion in operating profits with total sales of about 1.6 million units in 2011.

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4. Facebook

Facebook has taken over the world as the social networking giant since its launch in 2004.  CEO and founder Mark Zuckerberg is now a billionaire on paper and recent funding of $500 million from Goldman Sachs Group Inc. (NYSE: GS) put the valuation at a staggering $50 billion.  Suddenly, the Microsoft Corporation (NASDAQ: MSFT) investment of $240 million for a 1.6% stake and about $15 billion valuation seems like a steal.  Zuckerberg has said an IPO will be inevitable, but the time frame is ‘later,’ and he has tried to keep the act up that Facebook will not file for an IPO this year.  The SEC is inquiring about its sales of shares for insiders and over its finances due to the number of holders; the SEC requires companies with 500 or more shareholders to make financial filings almost the same as if they were a public company.   In the end, whether Zuckerberg wants to have it public or not, you could argue that Facebook is already partly public.

5. Frac Tec Services Inc.

Frac Tec Services Inc. has already filed its paperwork with the SEC for its IPO, and it has even selected a rather large consortium of investment banks, including Credit Suisse, BofA/Merrill Lynch, Citigroup, Morgan Stanley, and RBC Capital to lead its public sale.  Frac Tech may not be a well-known name but it owns 22 hydraulic fracturing units and the equipment used for services on wells with hard to recover resources.  The company has grown rapidly since launch of operations in 2006.  Sales for the nine-month period ending September 30, 2010 already were more than $800 million.  Petrohawk, XTO and Exxon Mobil are among its customers.  A unit of Chesapeake Energy (NYSE: CHK) owns about a 25% stake.

6. GNC Nutrition Centers

GNC Nutrition Centers may be public again.  This would not be its first time as a public company, and the sale is coming from Ontario Teachers’ Pension Plan after being acquired from Apollo Management.  GNC Holdings Worldwide owns and franchises 7,100  stores that sell vitamins, minerals, and other health products..  The 2010 IPO filing was for up to $350 million in stock, and it listed Goldman Sachs and J.P.Morgan as its lead underwriters.  Why might it not come public despite more than $1.7 billion in sales with operating income of $181 million?  Rumors have been out as recently as December that yet another private buyer may acquire it.

A full earnings calendar is available here for the week, including INTC, JPM, GE, APOL, SWY, AMD, GOOG, JBHT, INFY, and MAT.  Also, gold is getting jittery now and Friday’s $1,345 handle closed right in the middle of Thursday’s more than $30 point swing from high to low as it traded above $1,360 and below $1,330.  We took a look at the gold stocks and included a list of gold stocks that appear to be overvalued against peers and a list that appears to be undervalued gold stock against peers.

Alexza Pharmaceuticals Inc. (NASDAQ: ALXA) has an FDA PDUFA date for Monday regarding a decision on its AZ-004 as its lead program for treatment of agitation in schizophrenic or bipolar disorder. patients.  At $3.03, its 52-week range is $1.93 to $3.92 and shares traded roughly in a $3.10 to $2.70 range in the last week.

Alkermes, Inc. (NASDAQ: ALKS) has a decision due Tuesday for the approval of its opioid addiction treatment Vivitrol.  The drug is already approved as an injection treatment for alcohol dependence and the company has already had Phase III results showing that Vivitrol helped patients against opioid addiction. A panel has already recommended approval of the drug.  At $15.92, it hit a new 52-week high on Friday and the range is $7.54 to $15.98 and it traded in a wide range last week with a low close to $14.60 before it hit a new 52-week high.

AllianceBernstein Holding L.P. (NYSE: AB) was given the cover story from Barron’s this weekend. The article titled “A Deep Value Play” said that it got hit worse than most of its rivals in the financial crisis and it wonders if its new CEO (former Goldman Sachs member) turn it around.  Barron’s  points out that at $26.59 on October 1, shares were trading 64.7% below a pre-crisis high of $75.35.

Apple Inc. (NASDAQ: AAPL) has not yet formally announced its decision to sell the CDMA phone via Verizon Communications Inc. (NYSE: VZ).  The latest rumor is the umpteenth time the rumor has been out that a CDMA iPhone is coming to Verizon.  We expect formal confirmation on this soon, maybe as soon as this week or next week.

China New Borun Corporation (NASDAQ: BORN) is new as a stock and it produces and distributes corn-based edible alcohol in China. The company probably just got a lot more famous (if it was even known before) after this weekend because it unseated Netflix as the #1 stock in the Investors Business Daily 100.  The IBD 100 might not ramp it but it will be more on the map than ever now for many momentum investors.  IBD gave it a positive article last week as well and last Monday it was trading under $11.00 per share.  At $16.08, it hit a 52-week high on Friday and the post-IPO range this year is $4.80 to $16.14.

CIT Group, Inc. (NYSE: CIT) was given a very positive article in Barron’s called “On the Road to Redemption.” Barron’s noted, “The financial crisis pushed CIT into bankruptcy and John Thain out the door at Merrill Lynch. Together, they seem to be faring a lot better.”  At $40.79, its 52-week range is $24.83 to $42.94.  Look for a pop on Monday if the market holds up.

This movie will also may impact on new releases from News Corp. (NASDAQ: NWS) and Walt Disney Co. (NYSE: DIS). Of course, it will be important for IMAX Corporation (NASDAQ: IMAX), and Regal Entertainment Group (NYSE: RGC) and Cinemark Holdings Inc. (NYSE: CNK).

“Dragon” reportedly cost DreamWorks roughly $165 million.  The WSJ noted that about 56% of the “Monsters vs. Aliens” gross came from 3-D screenings in March of 2009 out of a total $59.3 million on its opening weekend, but noted that 68% of “Dragon” sales were from 3-D ticket sales.  That is a disappointment considering that many movie theaters have just put in price hikes to help pay for the 3D projectors and the new digital projector formats.   William Blair has DreamWorks under review and noted that the firm may trim as much as $0.40 to $0.60 from its expected $2.59 EPS this year.

News Corp. (NASDAQ: NWS) released Avatar on December 18 and it hit the $1 billion mark in box office receipts in

early January.  News Corp.’s stock was at $15.63 on the launch date, but it had also run up from under $14.00 at the start of December in anticipation of the blockbuster film giving it a free few-hundred million in earnings.  News Corp. is now a $17.00 stock.  It will be interesting to see if the April 22 DVD launch of Avatar will add yet another bump as a one-time payment will allow for unlimited viewing at home.

Walt Disney Co. (NYSE: DIS) saw ‘only’ $17.3 million in estimated weekend sales for “Alice in Wonderland,” but this Disney film has now grossed over $600 million since its launch.  With Thomson Reuters consensus estimates at about $37.5 billion for its fiscal 2010, the company is very broadly diversified from any one film.

The issue is that DreamWorks Animation SKG Inc. (NYSE: DWA) is now effectively a 3D pure-play, or at least will have the benefits of all titles being 3D.  DreamWorks’ shares were at $39.88 on the Avatar launch date, and it was at $34.60 on December 1…. by the end of last week the stock was peaking up at $44.00 and change ahead of “Dragon.” So it is of little surprise that shares are selling off.  But when you add in a “sell the news” AND a disappointing movie take, you now have a 9% drop back down to $38.95.  That takes away all of the after-buying from the hype of “Avatar” impacting 3D sales.

A big issue here is going to be the price hikes.  Some expect this to help and that the hikes of as much 25% will not hit movie sales.  Some are skeptical.  A quick take here is that at some point this becomes a luxury good rather than a staple entertainment spend.  Taking a family of 4 to see a 3D IMAX film of a hot new movie could effectively end up running almost $100.00 after you include gas, parking, drinks, and snacks at the theater.

Dreamworks’ weakness is having no impact on IMAX Corporation (NASDAQ: IMAX), as its shares are up 2% at $17.44.  The 3D movement and the increase in ticket prices is still a gamble and unknown for a consumer that is just coming off the Great Recession.  IMAX seems to be able to support its sales regardless because it is still in few enough venues that it can sell out its 3D IMAX seats for hot new movies.  That might not hold true for regular 3D movies and traditional movies all over the nation.

Regal Entertainment Group (NYSE: RGC) is down 3% at $17.43 and its 52-week trading range is $10.58 to $18.49.  Cinemark Holdings Inc. (NYSE: CNK) is down almost 3% at $17.70 and its 52-week trading range is $8.63 to $18.47.

DreamWorks will have to hope for a better launch of the ‘final’  Shrek in May.

JON C. OGG

• National Grid (NYSE: NGG) Raised to Overweight at HSBC.
• Qiagen (NASDAQ: QGEN) Started as Overweight at HSBC.
• Regal Entertainment (NYSE: RGC) Started as Buy at Merriman Curhan Ford.
• Williams-Sonoma (NYSE: WSM) Raised to Buy at Merrill lynch.
• Global Payments (NYSE: GPN) Cut to Neutral at Baird.
• Gold Fields (NYSE: GFI) Cut to Neutral from Buy at UBS.
• Quest Software (NASDAQ: QSFT) Cut to Neutral at Goldman Sachs.
• Tessera Technologies (NASDAQ: TSRA) Cut to Neutral at Piper Jaffray.

Jon C. Ogg
December 2, 2008

• Allied Capital (NYSE: ALD) Started as Underweight at JPMorgan.
• AT&T (NYSE: T) raised to Outperform at Bernstein.
• Boeing (NYSE: BA) Cut to Sell from Neutral at Goldman Sachs.
• NASDAQ OMX (NASDAQ: NDAQ) Raised to Buy from Neutral at Piper Jaffray.
• Nelnet (NYSE: NNI) Raised to Outperform at FBR.
• Permian Basin Royalty Trust (NYSE: PBT) Raised to Buy from Hold at Citigroup.
• Polo Ralph Lauren (NYSE: RL) Raised to Market Perform from Underperform at Morgan Keegan.
• Regal Entertainment (NYSE: RGC) Raised to Outperform at BMO Capital.
• Tibco Software (NASDAQ: TIBX) Raised to Overweight at JPMorgan.
• Winn-Dixie (NASDAQ: WINN) Raised to Outperform from Market Perform at FBR.

Jon C. Ogg
June 25, 2008

AMC Entertainment posted for the 52 weeks ended June 28, 2007, on a pro forma basis, revenues of $2.4 Billion, Adjusted EBITDA of $425.6 million, a loss from continuing operations of $60.3 million.  On a historical basis it had net cash provided by operating activities of $394.7 million. In the United States and Canada, as of June 28, 2007, it operated 311 theaters with 4,597 screens.  As of June 28, 2007, it had 66 theaters with 703 screens consisted principally of wholly-owned theaters in Mexico and an unconsolidated joint venture in South America.

It also currently owns approximately 18.6% of National CineMedia, LLC; and it currently own approximately 27% of MovieTickets.com, an Internet ticketing venture representing over 10,000 screens.  One thing investors need to know is that the movie theater operation in the U.S. has been one of the most frequently changed in owners, and AMC recently became under Merger Sub in June of 2007.  AMC is also reclassifying its stock classes and it is currently held by J.P.Morgan Partners, Apollo Investment Funds, Bain Capital, Carlyle Group, Spectrum Equity Investors, and management.

Other publicly traded movie theater chains are Regal Entertainment Group (NYSE:RGC), Cinemark Holdings Inc. (NYSE:CNK), and Carmike Cinemas Inc. (NASDAQ:CKEC).  There is also of course the offshoot National Cinemedia (NASDAQ:NCMI), which AMC has had an ownership in the parent holding company of.

Jon C. Ogg
September 13, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.