Shares of Lionsgate plunge despite huge open for ‘Catching Fire’

Hollywood take note: A blockbuster can be bad for your stock price.

Shares of Lionsgate, the studio behind the “Hunger Games” franchise, plunged more than 10 percent Monday despite rave reviews and a record opening weekend for the second film in the series.

“Catching Fire” booked an estimated $161.1 million at the domestic box office this weekend — the strongest November opening in film history. It took in a whopping $307.7 million worldwide.

The sudden sell-off baffled many in the industry. Some observers said the film failed to meet even higher pie-in-the-sky expectations of as much as $180 million heading into the weekend.

But a more likely explanation is that Lionsgate is suffering from the same sell-off syndrome that afflicts Apple and other companies after a big product launch.

“One long-held theory is that when there’s a big release, a big driver of earnings, the excitement builds into the release date and when the catalyst goes away the stock melts down,” said Vasily Karasyov, a senior research analyst at Sterne Agee.

Karasyov noted the same thing happened after Lionsgate’s first “Hunger Games” release in March 2012.

The much-anticipated film racked up an impressive $152.5 million in its opening weekend, yet the stock fell nearly 18 percent in the first month of its release.

Karasyov said that DreamWorks Animation and Pixar both experienced similar meltdowns in the 30 days after a big release.

DreamWorks saw its stock slump 15 percent after the release of “Madagascar 2: Escape to Africa,” which roared in 2008 with a $63.5 million start.

The same held true for Disney stock after releasing Pixar’s “Toy Story 3” in June 2010, even though the film went on rack up $1 billion worldwide.

Lionsgate has slated two more “Hunger Games” movies for release in 2014 and 2015. The stock, which has more than doubled in the past year, fell $3.53, or 10.5 percent, to close at $30.23.