Helios and Matheson Analytics Inc (NASDAQ: HMNY) is having an incredibly strong start to the trading session this morning, running up more than 10% in the pre-market. However, with a simple update to your trading chart, it becomes easy to see why. The stock is simply bouncing off of the bottom before preparing to fall again. Today, we’ll talk about:
- Why HMNY is fighting a losing battle;
- what we’re seeing from the stock today; and
- what we’ll be watching for ahead.
HMNY Is Fighting A Losing Battle
Helios and Matheson Analytics has seen dramatic declines since the end of last year, and for good reason. The company, famous for acquiring a majority stake in MoviePass and leading to an impressive run in subscribers, is operating a service that it simply can’t afford to.
At the end of the day, MoviePass is losing millions of dollars every month. Toward the end of last year, when it became clear how HMNY plans on covering the losses, the declines started. At the end of the day, management at the company isn’t digging into their pockets to cover the losses. Instead, they’re digging into the pockets of investors!
So far, HMNY has funded its company through the losses by moving forward with several massively dilutive transactions. In fact, these transactions caused such a decline that the company has had to move forward with a 1-for-250 reverse stock split to get its price above a dollar where it needs to be to remain listed on the NASDAQ. However, that didn’t last long as investors saw through the fasad and sent the stock tumbling.
Nonetheless, with a price of under $0.05 per share due to massive declines, another 1-for-250 reverse split is likely on the horizons. Even worse, the company is running out of money again, and its happening quickly. So, outside of the ridiculous sized reverse split, we’re likely to see yet another highly dilutive transaction in the near-term as the company has few options with regard to funding itself through these exorbitant losses.
What We’re Seeing From The Stock
Regardless of how grim the picture may be, traders will trade. After a recent massive decline, traders seem to believe that the stock has reached support and they’re reacting by pushing it toward the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:33), HMNY is trading at $0.021 per share after a gain of $0.0027 per share or 14.52% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
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 watching for another ridiculous reverse split and more dilution on the horizons as these seem to be the company’s only options as it works to dig itself out of the hole it has created. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!