Investors were feeling good about Lionsgate and Blair Witch on Friday when they drove shares up about 6.5% in anticipation of the film exceeding expectations. The curse of the Blair Witch hit hard on Monday with the studios’ shares down a reported 4.7% after the lower than expected $9.6 million opening weekend.
On the low end, Blair Witch was expected to do about $30 million at the domestic box office by the end of its run. By Friday, that number doubled to $60 million with many people feeling good about the film’s prospects. With an opening of $9.6 million, the film struggled to make it to $20 million on the domestic front and it’s not expected to do huge international business after opening to just $5 million in 27 different foreign markets.
Some analysts are still saying to look at the bigger picture in regards to Lionsgate. As it diversifies its slate, the studio “is not dependent on any one blockbuster film/franchise,” said B. Riley’s Eric Wold. He also urges buyers to “use any weakness in Lionsgate shares to add to positions” before it closes its acquisition of Starz, which the analyst says will drive “impressive” savings of about $200 million a year.
Despite a small $5 million budget, Lionsgate is said to lose a few million in the current quarter due to upfront marketing expenses for the film. It’s pretty clear the studio expected the film to be a sizable hit and are probably scratching their heads this morning trying to figure out what went wrong.
