Helios and Matheson Analytics Inc (NASDAQ: HMNY) is headed up early on in the pre-market this morning, working to recover from the tremendous declines seen on the stock yesterday. However, the gains seen this morning are likely short term. Don’t get suckered in as this stock is likely to see tremendous declines ahead. Today, we’ll talk about:
- What’s going on with HMNY;
- what we’re seeing from the stock today; and
- what we’ll be watching for ahead.
What’s Going On With Helios And Matheson Analytics
It all starts with MoviePass, which is often the story when we talk about Helios and Matheson. Over the past year or so, investors have realized that MoviePass is likely a losing endeavor, and the stock has seen tremendous declines as this realization has set in.
One of the big issues for HMNY is financial. The company is burning through boat loads of cash in an attempt to bring MoviePass to a profit. However, they have failed miserably at doing so. As a result, the company continues to get close to the point of running out of money. That is, until recently when the CEO at HMNY announced that the company raised $60 million.
Shortly after the announcement, the stock saw tremendous gains. However, yesterday, it started to fall off of highs as investors started to realize that this isn’t as good of news as it appears to be. After all, over he past year, the company has raised hundreds of millions of dollars through dilutive transactions. Whether it be bankers or brokers, the company seems to have been taken advantage of at every step. As time passed, the hundreds of millions raised were burnt through relatively quickly.
Now, the $60 million fund raise leads to more questions than answers. For example, what did Helios and Matheson have to agree to in order to get their hands on the $60 million in funding? How long with that $60 million last? And perhaps more importantly, why hasn’t a press release been issued stating where this money came from and the terms of the transaction? With more questions than answers, this transaction is more concerning to me than it is positive.
What We’re Seeing From The Stock
In the market, movement often happens in waves. In the case of Helios and Matheson Analytics, that’s exactly what we’re seeing. The stock flew as the result of the fund raise announcement, fell shortly thereafter, and is making its way up in the market this morning. While I don’t believe that the gains will last, the stock is making some investors happy. Nonetheless, our partners at Trade Ideas were the first to alert us to the gains. At the moment (5:07), HMNY is trading at $0.023 per share after a gain of $0.0018 per share or 8.57% 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 efforts to turn MoviePass into a profitable venture. While we don’t believe that the copany will ever be able to do so, 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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