35 thoughts on “Family Room Blog

  1. “Where’s the beef?” I spent all last year accumulating shares of Family Room Entertainment (FMLY) on such good news as being debt free, first profitable quarter in company history, look at all these new movies with the well-known stars, etc… I only need this stock to move 5¢ to make a profit. What do you think the real outlook is for this company??? With only six employees it could easily be bought up or declared defunct. The owners could easily “take the money and run.” I need another opinion. Thanks

     

    Editor: I believe this comment reflects the feelings of a lot of shareholders. I don’t believe there is any chance the owners are going to “take the money and run”- they have brought the company too far along. 2005 is a big year for production-  but it has to translate to stock price- There is too much upside here to abandon this one. Don’t be fooled by the 6 full time employees- their labor pool goes up into the hundreds when they are in production.

  2. Hopefully the new Ammityville Horror movie will help FMLY make a move out of the .06 range. If the movie sells, any idea of how much a move the stock could move?

     

    Editor: FMLY stands to make about $750K plus- more if they make sequels.

  3. I have raised private investment funds for films in the past, with direct allocation of the Producer’s share as ROI. Income to the company really depends upon the “Plus” — the Producer’s share which is % of Net or Gross. Definition thereof changes per pic produced. I have never invested in a company’s OTC, but thinking about it. Shouldnt their stock analysis depend upon how much of their contracted — and received– income is promised to get paid to investors? This is *very* different than what producer’s share is. With 90 Mill shares out it seems any return, no matter how profitable a pix, will always be slim to none. Is the main action here really “faith” some other fools will drive the stock up? Care to comment on this?

     

    I’m not sure I understand your point. Yes, the potential upside on each picture is variable as you stated. However, 90 million shares is meaningless- what is meaningful is the market value as an $.08 stock- only $7.6 million. If they can generate $5 million in producer profits off a couple of hits in the next two or three years, Wall Street would value the company at $50 million. Whether they have a percentage of the box office over a certain threshold or a percentage of producer profits, they are going to be cash flow positive over 2005 from the producer fees alone on 10 movies. The biggest challenge with this one in the number of shares i&o- if it stays here, you have a great shot at making money.

  4. Now that the toxic financing is out of the way you speak about the excess supply of shares. I know this is not science but can we get a feel how many shares OTC journal followers are holding? I personally am in it for the long run.

     

     Editor: 1,356,422 as of today. Not planning on selling any for the next month or two, but we reserve the right to sell anytime depending on market conditions and corporate capital needs.

  5. With no debt, tons of movies in the pipeline, with the # of shares out there, does anyone have a realistic handle on the potential value of this company. Is it .25, 1.00, 10.00 ?

     

    Editor: That is a really tough call. If they have a hit movie and a percentage of the gross once it hits certain thresholds, the sky is the limit. Making it even more difficult to predict a valuation is the number of share issued and outstanding. If they continue to issue shares, the value can go up without the price going up. This year the only major movie they have done that will hit the box office is Edison w/Justin Timberlake, Morgan Freeman, and Kevin Spacey. The movies they produce this year won’t be in the box office until ’06 or ’07. In the meantime, they are cash flow positive which helps reduce  the risk, and doing a higher level of movie than they have ever done. Also, they have not been very good a getting their message out to the investment community.

    One hit movie could easily yield $5 million in profits, which would be about $.05 per share in earnings assuming 100 million shares. This could easily equate to a $.50 over the long term.

  6. I have accumulated 1,000,000 shares and still plan on accumulating more. Truly after reading the year-end report it seems likely as well as reasonable that the .25 – .30 range is very possible soon (Who am I). I’m pleasantly surprised at the full pipeline and the planned projects. Should Edison be a reasonable success, it should be great for the bottom line in 2005. What ever happened to “Guest List Only” and Paris Hilton? (January 21, 04)

     

    You have taken a fairly sizable bet on this little company, and your upside target seems reasonable. The stock should trade fairly well over the next several months. There is a window of opportunity when there can be no dillution. I would lighten up my position at higher levels when those trading windows open, and keep some for the long term in case they have that big hit movie.

  7. Please clarify about the hit movie part. How much would a movie have to earn before fmly gets its $5mil profit?

     

    My guess would be $75 million to $100 million at the box office. It will take a big hit.

  8. From a technical standpoint a close above .092 is critical. Anything less is a waste of time. That’s less than a penny! We’ll see if we can squeeze out that penny.

     

    Thank you for contributing this. It will be intersting to see what happens at .092 and higher if and when we get there.

  9. How to explain the 3 trades to 0,071$ and 0,072$ on tuesday 18th jan. ? there were traded 2.5 mio pieces, but the bid-side was allways above 0,08$.

     

    Editor: I can’t explain it, and don’t really worry about stuff like that too much. However, normally  when you see a few large, below market prints, it indicates the market makers have organized a bunch of small orders and taken out one large seller.

  10. As I read Barry’s comment on 1/12/05 it sounds like his question is, who cares how much a producers profit goes up per picture if little or none of it goes into the pockets of the investors. Mr. producer can keep filling his own pockets and pass little or none on to the investors. So I guess my question would be: What percentage actually does go to the investors?

     

    Editor: None goes to investors if you mean shareholders. The money flows to FMLY and becomes part of their revenue stream which in theory should make the stock go up. Bottom line- they are going to need a hit movie to see and real residual revenues.

  11. I’ve been an investor with FMLY about 2 years and had several opportunities to bail with a profit, What I would like to know is the secret to becoming an disciplined investor so take profits when you double and not hope for the triple????

     

    Editor: That’s the $64 million question. When to sell- much harder than when to buy. I would perhaps suggest a compromise- perhaps sell some when the stock is trading well- buy some when no one wants it, and always hang on to a little in case they deliver the big move.

  12. I was online with Dann Gire a movie criric for the Daily Herald , a Chicago Suburban Newspaper. I was trying to see if he had any advance knowledge of how good or bad “Edison” was. He either couldn’t or wouldn’t say but he did give only 2 stars to Love Song for Bobby Long which FMLY is part of the producing group. He did say “Edison” will be release later this year.

     

    Editor: Interesting approach. I can’t hurt to dig 411 from people in the industry. There is no upside for FMLY in Bobby Long, so I haven’t been too concerned about it.

  13. When is FMLY going to release the movie EDISON and will we see it at the local movie theater or TV? Are there any schedules for releases of their other movies in the pipeline?

     

    Editor: I will fill everyone in on that information when I have it.

  14. Can you comment on dvd releases. Does FMLY get some sort percentage of sales or profits for the dvd rentals they release? Unstoppable was released a few months ago and Control will be released this month.

     

    Editor: Not in the case of either of those movies. They have a percentage of the producer profits, which would be included in the DVD rental revenues. They don’t really have anything in the past that could generate significant revenues from residuals. They need that hit movie.

  15. I read at the stockhouse bullboard about ther financial been up very high, the news is out for the last two days, why no mention on this board, I find that strange can someone verify, and clarify please, thank you.

     

    Editor: I have no control or really much interest over what is said on the boards. Seems like a lot of people have agendas on the boards which don’t match reality. However, they can be a good source of information when trading activity picks up.

  16. What I can’t understand is why all these projects if NONE, so far, seem to affect the bottom line, hence the stock price. I see the stock at IPO time was as high as $1.75. Any hope of it even ever going to .75 or a $1.00? Kenneth

     

    Editor: I would be happy if the stock were to go to $.25 after the problem this stock has been. Not much will really go to the bottom line until they have a hit movie- could be later this year or two or three years from now.

  17. On Jimbo’s comment of 1/23/2005. I created my own chart which creates a chanel between a 30 day high and 30 day low. I trade within that channel. Since I have 250,000 shares, a penny move in either direction = $2500 for me and I have to decide how much I’m willng to lose when the price goes down. Since I’m greedy, I’ll sell when I’ve lost $1000, wait to see how low it goes and then reinvest the money plus profits back into the stock. So far, my avg buy price is .072$ The avg sell price is .078$ Not much of a stretch but when you have a lot of shares, it ads up. This is how I’ve accumulated the amount I have so far. I follow this procedure with all my other stocks too.

     

    Editor: Nothing wrong with trading around a position to lower your cost basis on surges and pullbacks. You take some money off the table, but still have enough to where it matters if the stock happens to break out.

  18. Where would Family Room Entertainment (FMLY) fit into the Fibonacci scheme of things?

     

    Editor: Will post a chart on the BLOG in a day or two.

  19. Concerning my previous post, i am going to rephrase my question, How about FMLY numbers, where they out, yes or no, if not when should we expect them, I would think that OTC following FMLY, you would dig that information from the company for us, thanks.

     

    Editor: Certainly we will have the FMLY numbers, and they should be good comparisons. However, long term owning this stock for a huge return is all about having a hit movie. 

  20. From smallcappreview.com For fiscal year 2005, revenues have increased 731% over the same quarter of 2004. This increase in revenues is an increase of 1409% over fourth quarter of fiscal 2004, I am puzzeld, is this information ligit ???

     

    Editor: The  percentage increases I’m sure are accurate, but the actual numbers are fairly small. Owning this stock is all about the company having a hit movie.

  21. What ever happened to 88 Minutes. It looked more promising Then anyother picture but no news for quit a while. Is it canceled? Dareau

     

    Editor: No, it is not cancelled. It is financed, scripted, and cast. However, there is some kind of delay going into production, but the company has not disclosed what the nature is and how long the delay will last. In the meantime, they are lining up a bunch of new films, including a film with John Cusack and Morgan Freeman which was announced today.

  22. The Ammityville Horror movie was advertised on Fear Factor last night. One of the prizes was a free showing of the grand opening in April. Maybe this will help fmly out a little.

     

    Editor: They have already been paid for that, but I certainly hope so.

  23. What ever happened to the movie Edison it was finished production last Summer and I have not seen anything since?

     

    Editor: They recently invested another $1 million in Edison, shot some new scenes in Canada, and reshot a couple of others. They are adding a lot of action to the film. The additional shooting is done, and FMLY is now looking for the film to be released in the fall.

  24. Are there any comparable independent film companies that can be used as a guide of what to expect in terms of price once FMLY is a little more seasoned. Based on this pipeline, a year from now I feel we will be asking ourselves “what were we thinking when we were even hesitating buying at 7 cents!”

     

    Editor: None that I am aware of. However, if you look at the long term history of Lionsgate, you will find they had very meager beginnings.

  25. This is the new number of shares as of 25 February 2005….. filed with the SEC Form SB-2… any comment? 159,745,587 shares

     

    Editor: None of the new shares being registered in the SB2 has actually been issued at this time. The shares are under lying the $1.8 million in convertible debt the company entered into in December. The debt pays off in monthly increments over 5 years. The company has the option of paying the debt in cash or stock. Of course, the lower the stock, the worse the dillution. However, the note holder makes a lot more money on the conversion feature if the stock is trading over $.15 per share.  Therfore, there could be some stock coming into the market monthly for the next five years, which could adversely affect the price, or there might not be.

  26. Hi Can you tell me what the financial arrangement are with amityville remake. Are we in for a ride if it does well or are we all paid out? Dareau

     

    Editor: I believe they collected a one time fee of $300k for the film, and that is it. If there are sequels, they can collect more fees.

     

  27. It is my understanding that, at a certain point, FMLY will begin to collect a percentage of the take on films for which they serve as producers. I knew that services for “Amityville” were carried forward under the old one-time fee arrangement. I am not clear, however, as to when the new arrangement of benefiting from successful box office goes into effect for FMLY.

     

    Editor: If you are referring to Amityville, there is no arrangement on the box office side. They owned the property, but did not act as producer. They simply sold the rights for one film. If there are sequels, they could collect more.

  28. I am referring to upcoming films, those to be released after Amityville. Does FMLY have an opportunity to receive a percentage of profits on all upcoming releases, or does that arrangement begin at a certain point in time, i.e., as of the release of Edison, or, as of the release of 88 Minutes.

     

    Editor: No, they have no further upside in the film. If the film does well at the box office, and the studio wants to do a sequel, FMLY could benefit that way.

  29. A company with “NO” debt now has it with Zero move on stock value? If it hits .1 I’m out !! This is too much of a long term hold

     

    Editor: I can’t say as I blame you. Everyone has their own risk tolerance and time frame. The fact that you have a plan is great. Stick to it.

  30. Would ya’ll like to see this stock soar??? I could sell my shares and take the lock off. You’ve heard of those kinds of people before. The kind that buy into a stock and it goes down in value. They sell for a loss and then the stock skyrockets. Yep, you guessed it.

     

    Editor: So I guess you should sell all your shares and do us all a favor. Perhaps every shareholder could rebate you 2% of their profits, and help you get even. It’s the unwritten rule of investing- buy and they go down, sell and they go up.

  31. Yeah, it’s supposed to go like…Buy on bad news, sell on good. There has been nothing but good news for many of the stocks followed here. What’s happening with that???

     

    Editor: I have written exhaustively on tough market conditions for micro caps right now. I even published an edition telling every one who wasn’t long term to sell all their stocks and get out. It was on April 2nd. Apparently, you haven’t been reading this content. What more do you want? I’ll keep covering the events so you know what the companies are up to, but you have to pay attention.

  32. Edison was recently released outside NA for $25M What is that money for, is that all we get or do we still share in the profits?? DJ

     

    Editor: I am not aware that there has been any release on Edison- I am informed it won’t be released until the Fall or Winter. 

  33. Sorry I guess the Edison has sold outside NA for $25M but not released yet. The financier of the movie someone named Ave sold it to cover the cost of the film and is now negotiating for NA. Is there any truth to this?? DJ

     

    Editor: I will have to get back to you on that one. I am not aware of anything related to a sale of the movie.

  34. Edison was screened at the Toront Film Festival………….unfortunately to very bad reviews

     

    Editor: I had heard that 3 out of 4 were good, and one was bad. We’ll see what happens. You can ask the company about it on the upcoming confernce call.

  35. I aqm in the entertainment business and believe that FMLY has been used as the personal playground of the Co-Chairmans. They attribute sizable revenues to their “wholly owned subsidiary” and the expenses to the public company. All FLMY soes is develop the projects for a private company called Millenium/ Nu-image to finance and own. FMLY’s assets are just participations in films that rarely get to participations

     

    Editor: True- but they are not putting massive amounts of capital at risk. They provide a service, and if they hit winners, they stand to make a fortune. Until then, they are just keeping the doors open. Seems like they have a pretty good shot with the current production schedule, but who knows for sure. It’s not a bad business model, but only makes for a good public company with $40 million plus at the box office. They believe 16 Blocks with Bruce Willis and Wicker Man with Nicolas Cage both have really good shots.

     

    To me, the biggest problem with this company is the toxic financings they have engaged in. They have created massive amounts of supply in the stock,  preventing it from going anywhere.