Transformers: Much More Than Meets the Eye

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For fans of Transformers -- be it the morphing toys, the original animated series, or its recent revival on the big screen -- it's a good day to head out to the multiplex.

Transformers: Revenge of the Fallen opens in theaters today, angling to be one of this summer's biggest blockbusters.

Investors should be following the film's success, because it's not very often that a single theatrical release has so many marketable implications.

Hasbro (NYSE: HAS) will clearly be the biggest winner if the movie holds up as well as the 2007 flick that breathed new life into the company's toy brand. Transformers rang up $319 million in domestic ticket sales -- and $708 million worldwide -- according to BoxOfficeMojo.com. A healthy box office also typically translates into healthy DVD sales a few months later.

Hasbro isn't bankrolling the movies. Viacom (NYSE: VIA) will be watching the box-office receipts trickle in. However, Hasbro naturally gets its piece of the action in licensing fees. More importantly, a hot movie is the perfect catalyst to sell more of Hasbro's Transformers toys and sign even more licensing deals.

The more partners, the better. Burger King (NYSE: BKC) is now including toy premiums in its kid meals, and it's always good to get kids excited about a movie franchise. Activision Blizzard (Nasdaq: ATVI) is the developer behind the movie-based video game that came out this month.

Another company that can do nicely if the movie is a hit is IMAX (Nasdaq: IMAX). Director Michael Bay filmed several scenes using IMAX cameras, giving franchise fans a good reason to drive past the local multiplex in pursuit of the nearest IMAX screen. Transformers: Revenge of the Fallen: The IMAX Experience opens in a record 169 IMAX screens domestically today.

The film is already off to a healthy start on IMAX screens overseas, and IMAX expects that 230 screens worldwide will ultimately be screening the movie. Since the Motley Fool Rule Breakers recommendation is much smaller than Hasbro, a huge theatrical opening can be big news for IMAX's prospects.

So maybe we shouldn't be calling this "Revenge of the Fallen" as much as "Attack of the Risen." Transformers may go from being robots to cars, but it appears that they can also morph into money.

And investing opportunities.

Other stories that stick to the Optimus Prime objective:

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IMAX is a Motley Fool Rule Breakers selection. Activision Blizzard and Hasbro are Motley Fool Stock Advisor recommendations. The Fool owns shares of Hasbro. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz will probably check out the new movie at his local IMAX once the crowds die down. He owns no shares in any of the companies in this story. The Fool has a disclosure policy and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 25, 2009, at 10:43 AM, Varchild2008 wrote:

    You missed a big one. (HOTT) Hot Topic is selling Transformers merchandise. They are also going to sell Harry Potter gear later. Given that the share price has been spanked down to a 7 handle, now is a great time to scoop up this Small Cap retailer (with a caveat in regards to what is expected to be a dismal Q2).

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11/6/2009 4:00 PM
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