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Taking stock at the box office Computers: Online game blends Wall Street with Hollywood and Vine.

THE BALTIMORE SUN

I am hunched in front of my computer, grimly gripping the mouse in one sweaty hand, as if to keep it from scampering away. I am on the verge of losing everything, and it's all Tommy Lee Jones' fault.

"Volcano" drops four points, then eight. I frantically begin to sell off my shares. Perhaps there is still a chance of stopping the bleeding. Then the phone rings and I lose my Internet connection. I get rid of the caller (my mother) and reconnect. But "Volcano" has dropped another two points. Tears are streaming down my face. I can feel my portfolio losing its heft. With a few more clicks I finish unloading my remaining shares and flop onto the couch.

It is 10: 23 on a balmy Monday night. All told I have blown $200,000, and my year-to-date earnings have dropped to nearly zero. It is my darkest hour.

Welcome to the world of the Hollywood Stock Exchange (http: //www.hsx.com), an Internet game that marries two great American passions: the movies and the stock market. HSX, launched in spring a year ago, provides each of its players with 2 million fantasy "Hollywood Dollars" to invest in "movie-stocks" and "starbonds." Buy a sleeper hit for a song and watch your year-to-date average soar. Invest in a box-office bomb and find yourself without enough to buy a Pauly Shore bond.

If you're really good, though, you might find yourself among the elite on HSX's leader board. Already there are 12 "fan sites" run independently of HSX to help you get on that leader board. And HSX is making money with its virtual stocks and bonds.

Does all this sound silly? Nearly 40,000 rabid players would disagree.

"I check my portfolio five times a day, sometimes every hour," says Eugene Freedman, 23, a law student at the University of Maryland, Baltimore. "I tried to manipulate [the starbond market] for a while, but it didn't really work."

Michael Stein, 24, also at UMB, plays both HSX and the NYSE.

"I log on three to five times a day. I tend to do better on HSX," he says. "They allow insider trading."

Insider trading? C'mon, it's just a game, right?

Wrong, says Max Keiser, chief executive, "CIO" (chief imagination officer) and president of HSX. "This is not a game. This is life."

An overstatement, perhaps. But not in virtual Hollywood.

The first HSX fan site, dubbed "The Money" (http: //www.the-money.com) by 25-year-old Toronto Web page designer Gary Burke, appeared in January. It started out as a simple gathering place for HSX enthusiasts, but soon expanded to include a real-time stock ticker, a weekly column by a movie stock and starbond "expert," a bulletin board where players can share hot tips, and a real-time chat room for often heated movie discussions.

Today there are 12 HSX-related Web pages, or "money management" sites, dispensing insider tips and tricks for securing that coveted spot on the leader board.

What's the appeal? Simple, Burke says: "It allows people to close multimillion-dollar deals like Donald Trump. Everybody wants to be Donald Trump."

Maybe. But something else he says rings truer.

Asked why he spends so much time and money on this fantasy endeavor, he confides that he's heard that a lot of real movie executives play the Hollywood Stock Exchange, too. His Web site, he says, is a showcase for his goal: "To get a job in California working in the movie industry."

Not everybody may want to be Trump. But everybody wants to be in pictures.

I have taken what is left of my capital after the disaster that was "Volcano" and plugged it into "Father's Day," the comedy starring Robin Williams and Billy Crystal. Many touts are calling it the next "Mrs. Doubtfire."

On this prospect, I buy 24,000 shares at $38 a share. The per-share price of a stock is based on the estimated box-office take for the first four weeks of a film's release -- in the case of "Father's Day," $38 million. So 1 million shares are available at $38 a share.

As the movie's release date approaches, the stock climbs steadily toward 50. Then, a day before release, it inexplicably drops a point. I click over to the Chicago Sun-Times Web site and check film critic Roger Ebert's review. It's a lemon, he says.

I decide to follow my personal HSX motto -- so goes Roger Ebert, so goes the nation -- and unload all my shares at a tidy profit of $92,760. Two days later, the stock plummets into the 30s. Merrill Lynch, eat your heart out.

HSX is the brainchild of Keiser and Michael Burns, two former Wall Street stockbrokers who got rich in the feeding frenzy of the '80s. Burns eventually moved to Los Angeles and became the managing director of the local office of Prudential Securities. Keiser retired to Paris to write poetry.

There he met up with actor Alec Baldwin, and the two hatched an idea for a movie, which they sold to Miramax. Keiser moved to Los Angeles to produce his movie and ran into his old friend Burns.

Together, the two came up with the notion for HSX, and in April 1996, spent $500,000 to launch it. A little over a year later, the site has tens of thousands of subscribers, among them movers and shakers on Wall Street and in Hollywood.

HSX is free to subscribers. It earns revenue two ways, from advertisers who place their ads on the Web site, and from subscriber demographics (from profiles subscribers fill out upon joining) sold to the film industry. In essence, it's a 40,000-member focus group.

"We can tell a studio that single, German men whose mothers are named Shirley love their movie," says Keiser.

The Web site is only the beginning, just a foot in the door. If Burns and Keiser have their way, people will soon be investing real money in movies. Their movies.

HSX Films, their film division, has two films in preproduction, one a "post-apocalyptic, Elvis meets the 'Road Warrior,' fantasy desert story," the other "a coming of age story of four young men in a small town." A third, titled "Mixed Signals," stars Jason London and Brooke Langdon. Eric Tipton is set to direct.

Keiser and Burns are betting that people will fork over $50 for a piece of one of their movies even though the chance of making a profit or even recouping the investment is, in Keiser's words, "virtually zero." So why the heck would anyone want to invest?

Keiser is chomping at the bit to answer. First, he says, such investors would be helping to undermine the "draconian financing practices of the Hollywood cartel" by "underwriting this cultural infrastructure that the United States government has failed to do" and "turning this engine of capitalism around to create cultural wealth." Oh.

Secondly, "You're getting entertainment for your $50. You get a dedicated, password-protected Web site on which you can watch the movie being produced. You get discounts on merchandise. You get discounts on the videotape. Those $50 are getting you $50 worth of entertainment."

HSX's subscriber pool is growing at 2 percent a day, Keiser says. They plan to begin selling shares in their movie projects when they reach half a million subscribers.

For now, though, HSX remains a wannabe producer's fantasy -- and sometime nightmare.

May 7, 1997, will go down in HSX history as Black Wednesday. This is the day that shares of "The Lost World: Jurassic Park" became available.

So that they can raise the "cash" to buy the $149 shares, thousands of HSXers sell off all their other stocks, causing the market to crash. Every other major release plummets. Since I've already sold off "Father's Day," I survive relatively unscathed. Now I have a whole lot of money and nowhere to put it.

I see a preview for the new Sidney Lumet film, "Night Falls on Manhattan." It looks pretty good. I buy 10,000 shares. Nothing happens. Apparently, no one else has seen the preview. I sell off my stock, and take a small loss.

It's time to roll the dice.

With just three days to go before the release of "The Lost World: Jurassic Park," I take the chunk of money burning a hole in my virtual pocket and buy 15,000 shares of dinomania. The stock has crept up to 164. If "Lost World" tanks, it would be a bigger disaster than "Volcano."

I bite my nails through Memorial Day weekend. On Monday, reports start filtering through that "Lost World" has pulled in more than $90 million over the three-day weekend. If the box office remains consistent, "Lost World" will have grossed more than $200 million by its fourth week.

My portfolio is soaring. My year-to-date is off the charts. I am a stock-picking Wunderkind. But still, I am not even close to breaking onto the leader board.

No worries, though. "Men in Black," "Contact," "Air Force One" and a slew of other potential summer blockbusters are ripe to be exploited. Soon, all will bow to me as the true king of the Hollywood Stock Exchange.

Now if only I could find a date for this Saturday's matinee.

Pub Date: 7/04/97

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