Helios and Matheson Analytics Inc (NASDAQ: HMNY) is having an overwhelmingly rough start to the trading session this morning, and for good reason. The company announced the pricing of a public offering, leading to concerns surrounding dilution. Today, we’ll talk about the offering, what we’re seeing from the stock as a result, and what we’ll be watching for ahead.
HMNY Announces Pricing Of Offering
As mentioned above, Helios and Matheson Analytics is having an overwhelmingly rough day in the market after announcing news surrounding an offering. In a press release, the company announced the pricing of a best efforts underwritten public offering of 8,261,539 Series A Units.
In the PR, HMNY said that the Series A units in this offering consist of one share of the company’s stock and one Series A Warrant to purchase one share of common stock.
The company also said it plans on selling 969,239 Series B units. These units consist of one pre-funded Series B Warrant to purchase one share of common stock and one Series A Warrant. The units are being offered at a price of $6.50 per unit. The Series A Units under the offering will initially be exercisable on the first trading day after 1 year of issuance and will expire five years from this date. These warrants are exercisable at a price of $7.25. Series B warrants are exercisable any time after issuance and will expire after 5 years.
HMNY said that it is expecting to generate gross proceeds of approximately $60 million. The transaction should close around December 15th. Helios and Matheson Analytics will be using the proceeds from the offering to increase its ownership stake in MoviePass as well as support MoviePass operations. Funds will also be used to satisfy a portion of outstanding convertible notes and for general corporate purposes.
What We’re Seeing From The Stock
As investors, we know that offerings very rarely prove to be a good thing. After all, offerings like this lead to concerns surrounding dilution. As a result, we generally see declines following offerings. That’s exactly what we’re seeing from the stock today. Currently (9:32), HMNY is trading at $6.45 per share after a loss of $3.63 per share or 36.03% thus far today.
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This Could Be An Opportunity
As mentioned above, offerings are usually met with declines, as we’re seeing from HMNY today. However, this could prove to be an opportunity. After all, the company recently announced an agreement with regard to marketing a specific movie title, expanding revenue generation from the MoviePass product. Moving forward, Helios and Matheson Analytics is likely to further expand revenue generation from the MoviePass product through the sale of further data and marketing services. While the dilution is definitely a concern, it’s creating a dip that will likely prove to be a strong opportunity for gains ahead.
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 learning just how much of a percentage of the MoviePass product the company will be acquiring now. We’re also following the story surrounding expanding revenue through MoviePass. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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