Helios and Matheson Analytics Inc (NASDAQ: HMNY) is headed up in the pre-market hours this morning after yesterday’s announcement that the company has cancelled its 1-for-500 reverse stock split. While investors are rejoicing and the stock is headed up, I’m here to tell you that this is far from an opportunity.
Why HMNY Cancelled The Reverse Split
As mentioned above, Helios and Matheson Analytics is headed up in the market this morning after the company announced that it would not be moving forward with its proposed reverse split. If this were to take place, investors would be given one share of stock for every 500 shares owned. Nonetheless, we know that this is not going to be the case.
In recent press, HMNY said that it decided against the reverse stock split as it didn’t believe that it would have enough shareholder votes to move forward. As you could imagine, the shareholders that would have voted against the split, which represents the majority, were happy with the news.
That Doesn’t Mean That It’s Time To Get Involved
Sure, the reverse stock split was stopped and that’s what investors wanted to see, but that doesn’t make HMNY a good investment. The truth of the matter is that even at the low levels it has been trading at, the company has little to nothing of value. To make matters worse, the company faces delisting from the NASDAQ in mid-December, just a short month away.
The Series Of Events That Led To This
It all started back in August of last year when Helios and Matheson Analytics announced that it had acquired a majority stake in MoviePass. At the time, investors sent the stock running for the top, bringing it to new highs. That is, until investors realized that MoviePass was a losing concept.
As the losses started to rack up, HMNY started looking to dilutive transactions as a way to stay alive. Over the course of a few months, the stock gave up 99.999% of its value. While the company announced that it would spin MoviePass off, that became a damned if you do, damned if you don’t situation. After all, the company previously spun off its Red Zone business, so MoviePass was really the only thing the company had to offer its investors.
Now, HMNY is stuck between a rock and a hard place. The company has mounting expenses, little by way of resources, assets that continue to dwindle in value and investors that are losing faith. At the end of the day, if there is a company that’s destined for failure being traded on public markets today, this is the company.
What We’re Seeing From The Stock
Regardless of the negatives surrounding Helios and Matheson Analytics, when investors see something that they like, they tend to react in a positive way. That’s exactly what we’re seeing today as news continues to spread that the reverse split is off of the table. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:30), HMNY is trading at $0.02 per share after a gain of $0.003 per share or 17.65% 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 path to delisting and seeing if the company finds a way to do some magic between now and then to avoid it. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!