Regal Entertainment Group (RGC) owns 1,222,780 shares of RealD (RLD), maker of digital 3D cinema systems. At one point, Regal’s holdings were worth $42.8 million. Now? Not so much.
Chart courtesy of Stockcharts.com
Shares in RealD are trading around $8.76, a 74% decline from its highs set back in May of 2011. Regal Entertainment Group’s stake in RealD is now worth around $10.7 million.
We shouldn’t feel too bad for Regal Entertainment Group because their cost basis is a paltry $0.00667 per share.
In connection with the RealD, Inc. motion picture license agreement, the Company received a ten-year option to purchase 1,222,780 shares of RealD, Inc. common stock at approximately $0.00667 per share. The stock options vest in three tranches upon the achievement of screen installation targets. During the year ended December 30, 2010, the Company vested in all three tranches to purchase a total of 1,222,780 shares of RealD, Inc. common stock. The Company exercised its right to purchase shares of RealD, Inc. common stock during December 2010.
-Regal Entertainment Group 2010 10-K
Thanks to RealD’s aggressive option granting policy, Regal Entertainment Group will still walk away with a large gain. That is, unless, 3D is just a gimmick and movie goers stop paying higher prices to see bad movies in funny glasses?
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