DreamWorks Shares Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of movie maker DreamWorks Animation (NAS: DWA) were shooting higher today, gaining as much as 10% in intraday trading on the strength of its Puss in Boots movie.

So what: After a disappointing first week, the Shrek spin-off surprised critics by holding the top spot for movie goers and generating $33 million in its second week in theaters. The drop of just 3% from its debut week is notably strong and fired up investors. Worldwide, the movie has raked in roughly $115 million to date.

Now what: For investors that were concerned that Puss in Boots would prove a flop for DreamWorks, the weekend's box office numbers are likely a relief. The movie-making business is a hits-based one that lives and dies on whether it can wow audiences each time out and get them to open their wallets for tickets. DreamWorks has mitigated that risk somewhat through milking franchises like Shrek and Kung Fu Panda, and while Puss in Boots may not have quite the same profit punch as the ogre-focused series that it was spun off from, these numbers suggest the Shrek franchise may still have some juice left.

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At the time this article was published Motley Fool newsletter services have recommended buying shares of DreamWorks Animation. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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