Helios and Matheson Analytics Inc (NASDAQ: HMNY) is having yet another strong day in the market today, following up on the gains seen on the stock yesterday. However, savvy investors know to steer clear of this one. Today, we’ll talk about:
- Why the stock is headed up;
- what we’re seeing in the market;
- why savvy investors know to stay away; and
- what we’ll be watching for ahead.
HMNY Heads Up
As mentioned above, Helios and Matheson Analytics is headed for the top in the market this morning. However, if you do some digging, you’ll see that the gains are largely unwarranted. The truth of the matter is that the company hasn’t released any news, nor does it have any near-term catalysts to be excited about. So, what’s the deal? Here’s why the gains are happening.
Two trading sessions ago, HMNY fell to record lows, giving up a tremendous amount of value on its continued run toward the bottom. However, after a day filled with massive losses, traders saw what they believed to be an opportunity. Sitting on record lows, traders decided that it was time to put some money into the stock, hoping to take advantage of the recovery that became a self-fulfilling prophecy. Nonetheless, the gains aren’t likely to last long. We’ll talk about that in a bit.
What We’re Seeing From The Stock
As day traders continue to see opportunity in the fact that Helios and Matheson Analytics has fallen so far they are currently pushing the value of the stock upward. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (11:04), HMNY is trading at $0.13 per share after a gain of $0.01 per share or 8.73% thus far today.
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Why Savvy Investors Are Staying Away
While traders may be in a frenzy over HMNY at the moment, savvy investors are staying away, and for good reason. At the end of the day, Helios and Matheson Analytics is a company that’s on a fast track path to zero! The company made its name hit the mainstream when it acquired a majority stake in MoviePass back in August of last year. While this was a source of excitement at the time, with investors sending the stock screaming for the top, it quickly became clear that this was a bad move.
Ultimately, HMNY reduced the price of the MoviePass service from around $50 per month to an unsustainable under $10 per month. Unfortunately, the company pays full price for movie tickets used by its subscribers, meaning that the second time a subscriber goes to the movies in a month, that subscriber generates a loss for the company.
As a result of the massive losses generated by MoviePass, HMNY has been forced to move forward with multiple offerings in an attempt to get investors to foot the bill. While they have been successful in doing so thus far, their moves have led to a massive decline in the value of their shares as investors start to ask questions about the sustainability of MoviePass.
When these questions are asked, the company points to its plans of selling data and advertising as a way to turn the product profitable. However, over nearly a year, the company has shown no improvement in their financial data. Ultimately, MoviePass is likely to send Helios and Matheson Analytics to bankruptcy!
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 goal of turning a profit. While we don’t see this happening any time soon, we could be wrong. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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