A time series study on Marvel from 2000-2009: Marvel's movies impact relative to stock price

College

Ramon V. Del Rosario College of Business

Department/Unit

Decision Sciences and Innovation Dept

Document Type

Conference Proceeding

Source Title

9th Global Business Conference

First Page

6

Last Page

12

Publication Date

2-7-2015

Abstract

Marvel studios have provided an interesting study for many business students particularly generating more than $1.5 billion box office receipts for the movie "Avengers" last 2012. Disney bought Marvel for $4.24 billion and the question arises from the valuation of the company relative to the acquisition price. The study focuses on Marvel Entertainment's impact from movie releases relative to stock price. A time series analysis was used in gathering Marvel's daily stock price changes from 2000 - 2009. This was also used in parallel to 20 movies released by Marvel within that time period. The behavior of the market was examined using the GARCH (Generalized Autoregressive Conditional Heteroskedasticity) model and the EWMA (Exponentially Weighted Moving Average). A linear regression was used in testing the hypothesis on whether gross sales of movies and movie release (development, pre-production, production, post-production and release) have any significant to changes in stock price. GARCH (1,1) was used to measure the outliers for the signaling effect relative to huge changes on the time series data. The data results provided no empirical evidences due to relatively large p-values; however the spike of increase in changes were identified due to the release of Spider-Man 2 in 2004 and Iron Man in 2008. The conclusion of the study reflected on the impact Marvel has on mainstream Hollywood perhaps not on the valuation, but the future business earnings it may generate in the next decade.

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Disciplines

Business Administration, Management, and Operations

Keywords

Motion picture industry; Stocks—Prices

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