When the dream sours

Fri Jul 1, 2005



For hedge funds seeking star-studded returns in Hollywood, DreamWorks Animation SKG (DWA) must have looked like the best ticket around. Little did anyone know how soon it would turn into an investor's horror show, dropping a stunning 30% in a few weeks in May and June.

Run by media moguls Steven Spielberg, David Geffen and Jeffrey Katzenberg, DreamWorks came out of the gate via a $933 million initial public offering last October, followed by a monster hit called Shrek 2 that helped push its stock price from $28 per share to about $43 within its first two months of trading.

And with a bevy of would-be animated hits in the pipeline, who could blame Stanley Druckenmiller's Duquesne Capital Management from falling all over the company that had produced Shark Tale, a family flick that had chewed up the box office with $50 million in ticket sales on its opening day?...

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