) was being pursued by Sony. Now, Sony may not be the only suitor. The pioneer in sound and projection for giant-screen theaters is a huge success, and movie studios are eager for its technology. (Imax screens can be eight stories high and 120 feet wide.) Some investors believe it will deliver blockbuster gains. They argue the company would be a "strategic catch" for Viacom or Time Warner, both of which are also possible bidders. Shares have soared from 3 in February to nearly 10 in July, before easing to 8.09 on Oct. 15.
Bret Rosenthal, investment director at Wachovia Securities, which owns stock, is convinced it will double in a year. He says demand is rising for Imax' new technology, which lets studios convert 35mm films into the 15/70mm Imax format. Imax also has a new system to build stand-alone Imax theaters for 50% less than now. All this will swell demand for Imax format films, says Rosenthal. An Imax version of The Matrix Reloaded was released in June. The Matrix Revolutions is due on Nov. 5, and sequels to Spider-Man and Harry Potter are planned. Eric Wold of investment boutique Merriman Curhan Ford rates the stock a buy and figures Imax will earn 13 cents a share in 2003, on sales of $133 million, and 35 cents in 2004, on $159 million. Co-CEO Richard Gelfond says he's in talks with major studios to "Imax-ize" their big-event films. As for buyout rumors, Gelfond says when Imax attains its goal of widening its stock of films, "that will be the time to assess the stock price -- and our alternatives." Time won't comment, although pros note that it is on a debt-reduction path. Viacom was unavailable for comment.Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them. By Gene G. Marcial