Helios and Matheson Analytics Inc (NASDAQ: HMNY) is having yet another incredibly rough day as the stock falls closer and closer to record lows. While many have been holding onto this stock for months, waiting for something good to happen, it only seems as though more and more investors are losing faith in the company as it continues on its dramatic downtrend. Today, we’ll talk about:
- Why we believe that HMNY will continue to fall further;
- what we’re seeing from the stock in the market today; and
- what we’ll be watching for ahead.
Why We Believe HMNY Is Destined For Further Declines
We’ve been talking about Helios and Matheson Analytics for a while now. In the beginning, it seemed as though the company was going to see some impressive growth. After acquiring a majority stake in MoviePass, subscriptions flew through the roof and investors were excited. However, as time passed excitement faded.
Shortly after the acquisition, and after a dramatic rise to nearly $40 per share, investors started to lose faith, and for good reason. While the MoviePass was seeing dramatic growth in subscribers, it, and its parent, HMNY were seeing dramatic growth in losses. That’s because of the fact that when the acquisition took place, the price of MoviePass was reduced from nearly $50 per month to pennies shy of $10 per month.
That didn’t seem like a very bad move at first, after all, the subscriber base was flying. However, when investors started to see the losses that the growth in subscribers created, things got concerning. You see, HMNY has been covering the costs of full price movie tickets used by MoviePass subscribers. So, the second time each subscriber goes to the movie theater in a month, a loss is generated for the company.
With the growing losses, Helios and Matheson Analytics has had what it believed to be an opportunity. The company would cover the cost of the losses, acquiring more and more of the MoviePass service in the process. Unfortunately however, not only is MoviePass costing the company everything it’s got, the company has been digging deep in investor pockets to stay afloat.
In order to cover the expenses associated with MoviePass, HMNY has moved forward with hundreds of millions of dollars in offerings and convertible note sales. Unfortunately, these moves have been incredibly dilutive. To make matters worse, the dilution comes only to signal more. You see, HMNY is diluting shares when it needs money through offerings and the sale of convertible notes. Because of the continued growth in MoviePass, losses are continuing to rise. So, each time the company taps into the market, it runs out of money quickly, needing to twist the tap yet again. At the end of the day, the company has become a revolving door of losses, and those taking the biggest hit are those that for some reason, maintain faith in the company.
What We’re Seeing From The Stock Today
As investors continue to lose faith in Helios and Matheson Analytics, the stock maintains it’s trend of declines. Of course, our partners at Trade Ideas were the first to alert us to the movement. At the moment (8:36), HMNY is trading at $0.26 per share after a loss of $0.045 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 interested in following the story surrounding the company’s continued work to turn a profit. While we don’t think that this will ever be the case, the story is interesting to follow to say the least. Nonetheless, we’ll keep our eyes peeled 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!