Helios and Matheson Analytics Inc (HMNY) has been an incredible stock to follow as of late, and for good reason. From September 13th to October 11th, the value of the stock climbed from $2.50 to more than $32 in a dramatic rise that looked like it was going to run for the long haul. While the stock has lost most of its value since it peaked at $32.90 per share, there’s still a heavy debate as to whether the stock is headed for the top or the bottom. Today, we’ll talk about both sides of this debate and what you should be watching for with regard to HMNY ahead.
The Bears Are All Over HMNY
The first argument that we’re going to cover here is the bearish one, and while the argument is a relatively simple one, it’s also an incredibly valid one. You see, MoviePass, the product that brought Helios and Matheson Analytics to the limelight in the first place. is the primary reason why the bears are concerned.
Shortly after HMNY acquired a majority stake in MoviePass, the company reduced the cost on the service from around $40-$50 per month to only $9.95 per month. While this was great when it came to improving the subscriber base on the service, it’s not good for the bottom line. At the moment, the company pays full price for movie tickets used by its subscribers. At just $9.95 per subscriber per month, the company stands to lose money for every subscriber that goes to the movies more than once per month. In high income, high population areas, one trip to the movie theater could lead to losses for HMNY.
Ultimately, the bears argue that at the current price, MoviePass will never be a profitable service. Think about it this way, the average movie ticket is around $8.97 per ticket, let’s round that up to $9. Now, let’s say that each one of the MoviePass subscribers go to the movies twice per month, which is likely about the average on the service. If that’s the case, the company is spending around $36 million on movie tickets per month. However, subscribers are only paying about $20 million per month. That means that MoviePass is likely generating a loss of around $16 million per month. That’s a tough pill to swallow.
At the end of the day, the bears argue that this loss is too much for Helios and Matheson to take. Ultimately, the bears believe that given the losses on MoviePass, HMNY will need to continuously raise funds to support the service, diluting shares and leading to further declines as time passes.
The Bulls See Opportunity
While the bears point to the losses generated by MoviePass as a reason to avoid HMNY, the bulls don’t mind taking the losses in the beginning. Ultimately, no one will argue that the company is likely losing money on subscription fees. However, the bulls argue that in time, the losses will turn into massive profits, not from subscription fees but from the data mined through the service.
At the end of the day, HMNY has a massive amount of data from MoviePass subscribers. In today’s economy, data is one of the most valuable assets out there. Not to mention, the company has been clear about the fact that they will be selling marketing services and data packages in order to monetize the service.
The bulls argue that while Helios and Matheson Analytics is taking a loss at the moment, MoviePass will be the goose that lays golden eggs. Ultimately, the bulls believe that HMNY is going to take the data and their marketing capabilities to create a profit in the long run.
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Is HMNY A Strong Investment
The reality is that there’s no way to tell the future. However, given the data, this one is a bit of a toss up. In reality, HMNY has everything it needs in order to bring the company to a profit. It has the data, the expertise and the technology. Well, it has almost everything. One major factor is time, and the company doesn’t have much of it. The big question however is, considering the losses that the company is experiencing as a result of MoviePass, will it be able to withstand these losses until it can create a profitable product from the data? That is a question that’s impossible to answer. However, we are hopeful that the company will get the data and marketing product in order before losses become too much. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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