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I made a lot of money in IMAX in 2009. It was clear to me then that the day of feature movies making real money was finally here. My big mistake was selling way too soon.

IMAX has fallen back to earth (down 25.4% over the last 52 weeks) and it would appear that the poor showing at domestic theaters is the reason. That poor showing, though, is not at IMAX (although my last post about AMC's results are a concern on that front even if AMC ordered 10 news systems last July)). The market knows that 66.8% of last quarter's revenue was from the US and Canada. So, domestic matters.

Consider this. In the domestic market, tickets (seats) sold fell 5.2% in 2010 and 4.2% in 2011.

AMC and the other majors are not riding high financially in the domestic market. But, the box office gross is up 12.2% so far this year. Since this isn't prime time in the theater business, few are paying attention.

Any domestic concern has to be weighed against the Wanda deal last March for 75 screens in China. The day is quickly coming when the international business will be more than half of the revenue.

I do have concerns. My principle one is that a company with 64.7 million shares has way too many shares available for employee stock options:

As at September 30, 2011, the Company has reserved a total of 12,934,812 (December 31, 2010 — 12,829,115) common shares for future issuance under the Stock Option Plan, of which options in respect of 7,195,529 common shares are outstanding at September 30, 2011. All awards of stock options are made at fair market value of the Company’s common shares on the date of grant.

I am also concerned that world tension could explode into a major war. If that war interrupts the flow of oil, the high cost and limited availability of gasoline could encourage people to stay at home and watch their TVs.

As I said in an earlier post, my ability to pick movie hits is very poor. But, this year looks like it is loaded with potential. Hunger Games in March should get the year off to a great start. 2012's movies, and the fact IMAX seems to be building a technology mote with the Kodak patent purchase, I think IMAX has a great chance to beat analyst estimates for 2012 of $1.04 a share.

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