AOL Time Warner Inc, the biggest media company, likely will get a boost to its stock price in the days before the Nov. 16 US film premiere of Harry Potter and the Sorcerer's Stone, investors said.
The movie, based on the first in a series of children's books whose sales exceed 107 million copies, debuted yesterday in London and is expected by many analysts to be the top holiday hit with as much as US$260 million in North American box-office sales.
Ticket sales and merchandising of toys, candy and other items may boost AOL Time Warner's fourth-quarter and 2002 sales and profit. AOL Time Warner Chief Executive Gerald Levin earlier this year said the film, which depicts the adventures of a young orphan learning to be a wizard at Hogwart's School of Witchcraft and Wizardry, would be the top-grossing Warner Bros movie ever.
PHOTO: REUTERS
"Historically, when you get this kind of well-anticipated event, you get a short-term run-up in the stock," said Walter Price, a money manager with Dresdner RCM Global Investors, which owns shares of AOL Time Warner. "It is the beginning of what I think will be a franchise."
AOL Time Warner shares rose US$1.47, or 4.6 percent, to US$33.48 on Monday. The stock has declined 37 percent in the past year.
One Harry Potter rival for children's attention in the holiday season grabbed the top spot at the box office this weekend. Walt Disney Co and Pixar Animation Studios' Monsters, Inc premiered as the best-selling movie in the US and Canada with an estimated US$63.5 million in ticket sales, the biggest opening ever for an animated film.
"It couldn't be a better time for fantasy, and that's what happened with Monsters, Inc," said Henry Asher, president of New York-based Northstar Group Inc, which owns AOL Time Warner shares. Harry Potter "certainly would be supportive to [AOL Time Warner] stock. It's a positive."
Harry Potter, written by British author JK Rowling, also is likely to perform well outside the US. The book has been a best-seller in the UK and other countries. Movie ticket sales outside the US and Canada will at least equal the domestic gross and may be twice as large, analysts said.
Shares of Bloomsbury Publishing Plc, the publisher of the Harry Potter series, rose today on expectations that the film will drive additional book sales. Bloomsbury shares rose ?0.35, or 4.4 percent, to ?0.837-5 in London.
The hit movie Titanic shows how important a single film can be to a studio. It was the highest-grossing film ever, generating about US$600 million in domestic ticket sales and US$1.83 billion worldwide. That boosted the shares and financial results of co-producers News Corp and Viacom Inc.
Viacom stock rose 37 percent from November 1997, before Titanic was released, through the end of February 1998, when the film became the biggest box-office success in history. The film also helped Viacom report a smaller-than-expected quarterly loss.
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