Helios and Matheson Analytics Inc (NASDAQ: HMNY) isn’t having the best of days in the market today. After releasing what it planned on being positive news, the stock started to sink. The news had to do with growth in MoviePass subscribers, but it seems as though investors are reading between the lines. Today, we’ll talk about:
- The news;
- what we’re seeing from HMNY as a result; and
- what we’ll be watching for with regard to the stock ahead.
HMNY Announces MoviePass Growth
As mentioned above, Helios and Matheson isn’t having the best of days in the market today. In what seemed to be a positive press release, the company announced that MoviePass (its majority-owned subsidiary) has exceeded 3 million paying subscribers. This rapid growth is expected to continue. In fact, the company is expecting to see its subscribership grow to more than 5 million by the end of 2018.
In the release, HMNY outlined the fact that MoviePass accounts from more than 5% of box office receipts and, when actively advertising films, box office receipts see a push to over 30% in peak weeks. In a statement, Mitch Lowe, CEO of MoviePass, had the following to offer:
MoviePass is moving quickly and decisively on a course to continue innovating the film industry from the ground up and delivering audiences for films and films for audiences… This is the eve of a transformative time in the movie industry. We are witnessing the dawn of a new Golden Age, where audiences, studios, and exhibitors are all connected, from top to bottom — all in the interest of diversifying the movie-going palate and demonstrating the success of smaller, independent titles.
While this seems like good news, it’s anything but. The truth of the matter is that HMNY is still paying the full price of movie tickets used by its subscribers. That means that, at a price of under $10 per month, the second time each of these moviegoers visits the theater in a month, they generate a loss for the company. So, while subscribers are growing, as is expected with such a great deal, losses are likely expanding!
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news causes moves. In this particular case, while the news seemed to be positive, savvy investors are reading between the lines and seeing that Helios and Matheson Analytics is in for even more losses. So, it’s no surprise to see that the stock is headed down. Of course, our partners at Trade Ideas were the first to alert us to the declines. At the moment (10:44), HMNY is trading at $0.39 per share after a loss of $0.0039 per share (1.00%) 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 continued growth of MoviePass and seeing just how long it takes for its parent company to go broke as a result of the growth. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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