Helios and Matheson Analytics Inc (NASDAQ: HMNY) is a stock that we have followed incredibly closely, and our opinion on the stock is less than bullish. So, when we came across a Seeking Alpha comment on an article calling HMNY a lottery ticket, we were surprised. Nonetheless, the comment reads:
This is my lottery ticket. 18k shares for a few hundred dollars? HECK YEA MAN! See y’all in Caribbean islands!!
While we understand that the low price presents an opportunity should the stock run up. However, we’re here to tell you that HMNY is destined for further declines and the stock couldn’t be further from a lotery ticket. Today, we’ll talk about:
- Why HMNY is no lottery ticket;
- what we’re seeing from the stock today; and
- what we’ll be watching for ahead.
Why HMNY Is No Lottery Ticket
As mentioned above, we recently came across a comment pointing to Helios and Matheson Analytics as if the stock represented a lottery ticket. Well, that’s definitely not the case. You see, lottery tickets are purely game of chance. While chances aren’t that great that you will win anything, the chances are there. That’s the key difference between the lottery and HMNY.
At the end of the day, an investment in HMNY should be based on research and an opinion that the stock is going to head up. However, through our research, we’ve found that the reality is anything but positive.
Helios and Matheson Analytics made its name through the acquisition of a majority stake in a losing service known as MoviePass. Through the service, the company allows subscribers to see up to 3 movies in theater per month, paying full price for the tickets used by subscribers. The probelm is that the subscription fee, at just $9.95 costs about the same price as a movie ticket. Therefore, the second time each subscriber visits the theater, he or she is generating a loss for the company.
The idea behind HMNY isn’t necessarily to make money off of subscription fees, it’s more about making money off of data. However, to date, the company has only been able to generate between $4 and $6 per quarter, per subscriber in non-subscription revenue. This simply hasn’t been enough to foot the bill.
So, to cover losses, the company has moved forward with various instances of death spiral financing. To make matters worse, it looks like another one of these instances is on the horizons, as outlined by the Seeking Alpha article linked to above. At the end of the day, the company is riddled with massive losses, and the only option it has to get out from under the losses is to dilute shares further. All in all, HMNY is destined for more declines!
What We’re Seeing From The Stock
It seems as though most investors are realizing that Helios and Matheson Analytics isn’t producing riches for anyone but its own management. This can be seen through the dramatic declines we’ve seen on the stock over the past several months. Those declines are continuing today. Currently (8:30), HMNY is trading at $0.021 after a loss of $0.0001 per share or 0.48% 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 company’s continued work to try and turn a profit. However unlikely this may be, the company is trying nonetheless. We’ll also be watching for the next dilutive move as the company’s finances say that one is coming soon. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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