Helios and Matheson Analytics Inc (NASDAQ: HMNY) is a stock that we’ve talked about a lot recently. In fact, a few days ago, I received an email from a tipster stating that a student run fund by the name of TRITON FUND is considering a hostile takeover of the company. Since then, I’ve had the opportunity to have multiple conversations with the guys at TRITON FUNDS and I’ve learned that there is validity to the story. Today, we’ll talk about:
- Who TRITON FUNDS is and why they’re interested in HMNY;
- what we’re seeing from the stock in the pre-market this morning; and
- what we’ll be watching for ahead.
TRITON FUNDS Is Interested In HMNY
As mentioned above, the fund at the center of the potential takeover is known as TRITON FUNDS. TRITON is a student managed fund that is run by students of UC San Diego. The students came up with the idea over the Summer last year, and in April of this year, launched the fund.
The ultimate goal of the fund was a relatively simple one. The fund was designed to give students hands on experience in the investing world. The founders of the fund, Nathan Yee, Sam Yaffa, and Yash Thukral saw an opportunity to give students hands on experience, but took on some responsibility of their own. Not only does the fund have the fiduciary responsibility that any fund has to its investors, it’s also got the responsibility of ensuring that its student members are learning. Nonetheless, the firm seems to be doing a great job of just that.
Why Triton Is Interested In Helios And Matheson Analytics
When I first asked TRITON why the fund was interested in Helios and Matheson Analytics. One of the first statements made by the team was “Everyone we know owns HMNY.” The students went on to explain that Helios and Matheson falls right in line with what they’re looking for. Here are some key points:
- Millenials – HMNY has built a business that should cater to millenials. However, TRITON believes that the company’s management fails to see the opportunity and use the right marketing strategy to bring millenials in.
- Data – TRITON’s founders also explained that Helios and Matheson’s MoviePass was never about making money on ticket sales. Instead, the company is grabbing data, and the guys at TRITON see real value in that data. In fact, they pointed me to the terms of service at MoviePass, which outlines the fact that the company has the ability to sell the data to whoever they’d like. In the conversation, the young fund managers explained that for the right parties, this data provides an incredible opportunity.
- Mismanagement Brought The Price Down – Finally, TRITON pointed to the fact that HMNY has been mismanaged as a publicly traded company, not from an operational standpoint, but from a financail standpoint; pointing to the idea that the company has been taken advantage of by every banker and institutional investor that has gotten involved. As a result, Helios and Matheson Analytics’ investors have been the victims of incredible dilution that has brought the price of the company down dramatically. Nonetheless, due to these declines, TRITON FUNDS sees an opportunity to strike at a low price.
In a statement, TRITON had the following to offer:
Management knows how to run the company that they set out to run. However, they don’t know how to run a public company. As a result, they have been taken advantage of by their bankers and existing investors. They need a new investment group to come in and clean up company and take it private at a valuation that makes sense for current shareholders. That may be difficult to do. So shareholders of the public company will likely become shareholders of the private company. It will be cleaned up from there.
I’d like to point out that TRITON FUNDS has not confirmed that they have or are going to make an offer to acquire HMNY. However, they have confirmed that they are in talks with the company.
What We’re Seeing From The Stock
Helios and Matheson Analytics has been seeing serious declines as of late. While the stock is up in the pre-market this morning, the gains likely won’t last long. Nonetheless, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:06), HMNY is trading at $0.10 per share after a gain of $0.0050 per share or 5.00% 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 Helios and Matheson Analytics. In particular, we’re interested in following the story surrounding the potential deal between HMNY and TRITON FUNDS. Nonetheless, we’ll continue to keep a close eye on the news and bring it to you as it breaks!
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