If you’ve been watching Helios and Matheson Analytics Inc (NASDAQ: HMNY) fall in the market as of late, you may think that after the last two days of substantial declines, the stock has reached the bottom. So, now may be a good time to invest in the stock right? WRONG! Today, we’ll talk about:
- Why HMNY is an absolutely horrible investment;
- what we’re seeing from the stock today; and
- what we’ll be watching for with regard to HMNY ahead.
Why HMNY Is A Horrible Investment
Helios and Matheson analytics has been on a tear toward the bottom as of late, and for good reason. Since investors started to realize that its flagship product, MoviePass was a losing concept, we’ve seen a relatively consistent decline in valuation. Well, I’m here to tell you that the declines aren’t going to stop, and the reason is relatively simple:
Let’s forget about HMNY for a moment and pretend that I was going to start a business. My business would be overwhelmingly successful because I would be giving away money. Ultimately, I would charge subscribers $9.95 per month. In exchange, they would receive a fast food card, giving the access to all the fast food they want throughout the month on an unlimited basis. Before starting this promotion, I wouldn’t make deals with any fast food companies. So, when a subscriber paid using my FoodPass, I would have to pay the full price of the bill. Would that be smart? Of course not… I would lose my rear end.
Well, when we talk about HMNY, that’s exactly what the company is doing in another industry. MoviePass allows users to see movies all they want for $9.95 per month. However, the company pays full price for the tickets used. That’s why HMNY has had to raise more than $300 million from the market in less than a year. Ultimately, the costs associated with MoviePass are too much.
Unfortunately, more offerings and more dilution is likely on the way. So far, there is no insinuation that MoviePass or Helios and Matheson are getting anywhere near generating a profit. At the same time, their subscriber base is growing, meaning that losses are doing the same. The final sign was the ridiculous 1-for-250 reverse split the company recently processed. This put it well ahead of the minimum bid price requirement for the NASDAQ and opened the door for further dilution-related declines. All in all, it was a horrible move that just goes to show how horrible of an investment HMNY is.
What We’re Seeing From The Stock
Following up on the massive declines that we saw both yesterday and the day before, Helios and Matheson Analytics is having a horrible time in the market this morning. Of course, our partners at Trade Ideas were the first to alert us to the declines. At the moment (9:39), HMNY is trading at $6.66 per share after a loss of $0.17 per share or 2.55% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on HMNY. In particular, we’re interested in following the story surrounding the company’s continued spiral toward bankruptcy. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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