Helios and Matheson Analytics Inc (NASDAQ: HMNY) is a stock that we have loved to hate as of late. Unfortunately, too many investors have already loss massive amounts of money, and if history is any indication, chances are that the declines will continue! Nonetheless, on Tuesday of next week, HMNY faces a hurdle with its MoviePass subsidiary that it hasn’t faced just yet. That hurdle…. COMPETITION! Today, we’ll talk about:
- The competition that’s just around the corner;
- why HMNY is likely to see drastic declines ahead; and
- what we’ll be watching for moving forward.
HMNY Is Going To Face Competition
Since the acquisition of the majority stake in MoviePass, Helios and Matheson Analytics has been the only big fish in a massive pond. However, on Tuesday, that all changes. That’s because AMC recently announced that it is going to offer a new service that gives its guests the option of seeing three movies per week at a monthly fee of $19.95. The new service, dubbed the A-List, is a direct competitor to MoviePass. While the fee for AMC’s a list is about double the $9.99 per month offered by HMNY, the service is likely to be a strong competitor. Here’s why:
- AMC Perks – The new services will come with perks that HMNY doesn’t offer. At the moment, MoviePass only allows the viewing of basic 2D movies. However, the AMC A-List will offer movies in premium formats like IMAX, Dolby Cinema and RealD.
- Advanced Booking – Another advantage that A-List has over MoviePass is that it allows users to book movies in advance. This ability isn’t available with MoviePass.
Why HMNY Is Likely Headed For The Bottom
At the end of the day, when Helios and Matheson Analytics acquired MoviePass, it reduced the price to an unsustainable rate. With MoviePass paying full price for movie tickets, each user paying $9.99 per month that goes to the movie theater more than once in a month generates a loss for the company. We all know this.
However, our bearish opinions go deeper than that. Since the acquisition, in order to cover the growing losses associated with MoviePass, HMNY has moved forward with multiple dillutive moves. In fact, recently, the company issued $164 million in a mix of convertible notes and shares. The company said it plans on using the funds for general corporate purposes, which we all know means to furhter fund and support MoviePass ventures. The bottom line here is that nothing HMNY is doing to turn a profit is working. The company continues to reach for straws, acquiring companies it has no idea how to turn profitable, and doing so at the cost of further future dilution.
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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 work to bring MoviePass to profit and how the MoviePass service reacts to coming competition. While we believe that the stock is headedfor big declines ahead, anything can happen in the market. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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