"The Greatest Canvas In The World"
Imax Corporation (IMAX) Initiation
“IMAX is the greatest canvas in the world, and some filmmakers want the chance to paint on that canvas… It's the Rolls-Royce of projection systems.”
In March 1994, shortly after Gelfond had experienced IMAX for the first time, he was involved in a deal with Wasserstein Perella to acquire the company for ~$80 million. At the time, IMAX was a niche business focused on nature documentaries at museums and science centers; Gelfond and his business partner, Brad Wechsler, saw a larger opportunity: “The people running IMAX were filmmakers, not businessmen. We thought that with relationships, monetary resources, and a more professional management team, we could really make a difference… IMAX had the potential to be a lot bigger.”
Shortly after its IPO, IMAX caught Mr. Market’s attention: the stock, which traded at <$4 per share in early 1995, eclipsed $32 per share in late 1998 (prices adjusted for 2-for-1 stock split in 1997). That optimism proved short lived, with the company facing significant financial pressures after the turn of the century that culminated in a >95% stock price decline and questions about their solvency. (2001 IMAX annual report: “We retired ~$90 million of the $100 million 5.75% Convertible Subordinated Notes due April 1, 2003 at an average cost in cash and shares of less than 24% of face value.”)