Hulk Smashes Marvel

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By Mathew Emmert (TMF Gambit)
June 23, 2003

Marvel Enterprises (NYSE: MVL) is taking a Hulk-sized beating today despite a strong showing from The Hulk at this weekend's box office, with shares of the rejuvenated media firm off about 10%.

The Hulk's large, green form brought in over $60 million -- of an even better kind of green -- at the box office this weekend. So, why is the market shunning the stock?

Well, first off, we should note that the overall market isn't doing so swell today, with the S&P 500 down about 1.6%, so it's hard to say how much of the drop can be attributed to the intrinsic happenings of Marvel alone.

Then there's the fact that those little ole Marvel shares have climbed from about $1.50 a stub to just over $25 in the past two years, before settling back to a current price of about $19. It appears that anyone who's held the shares longer than a few months doesn't have much to complain about. Indeed, readers of our Motley Fool Stock Advisor newsletter certainly haven't been complaining since David Gardner turned them on to the stock back in the single digits.

Interestingly, this post-release sell-off isn't a new phenomenon for Marvel. If you look back over the history of the stock, you'll notice the shares, after experiencing a big pre-release run-up, tend to sell off shortly after opening weekend. This was most notable after the huge rise in the shares prior to the release of the mega-hit Spider-Man. The behavior could probably be attributed to speculators trying to ride the media blitz surrounding big releases, which would also help to explain the periods of extreme volatility in the shares.

Either way, longtime believers in Marvel probably aren't paying much attention, because despite today's sell-off, they've still managed to see a whole lot of green.

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