Helios and Matheson Analytics Inc (NASDAQ: HMNY) is having a relatively strong start to the trading session. However, if you go digging, there’s no news to be released. What we do find is that the stock tanked yesterday on a continuation of declines from news of a reverse stock split. The gains today are largely the result of investors trying to get in at a discount. Nonetheless, even with the declines, HMNY is trading at no discount. Today, we’ll talk about:
- What caused the most recent drop in HMNY and why today’s price is no discount;
- what we’re seeing from the stock in the market today; and
- what we’ll be watching for ahead.
HMNY Is NOT Trading At A Discount
Helios and Matheson’s gains in the market this morning are likely the result of some investors and traders believing that today’s price represents a discount after recent declines. However, there’s good reason for the recent declines. Now, HMNY is a highly covered stock, and if you’re reading this, chances are that you already know a few things:
- HMNY is the parent company of MoviePass.
- MoviePass has been generating serious losses.
- Helios and Matheson has seen an incredible reduction in value as a result.
We all know these facts. However, with recent news, there’s more to be concerned with. The company recently proposed a 1-for-500 reverse stock split. The goal of the split would be to bring the company’s share price above $1.00 per share in order to maintain its listing on the NASDAQ.
Some investors may believe that this is a good thing, but in reality, it’s horrible. At the end of the day, HMNY has made several horrible moves that has put it in a tough financial position. As a result, in the past year, it has moved forward with two massive dilutive transactions, taking value from investors to keep the show going. Unfortunately, if the company gets its reverse stock split approved, chances are that another dilutive offering is just around the corner, leading to massive declines. If not, the threat of delisting from the NASDAQ is also likely to lead to declines. So, in the case of HMNY, we have a damned if you do, damned if you don’t situation that’s likely to end in losses no matter what happens with the reverse split vote.
What We’re Seeing From The Stock
With recent declines on the stock in mind, some believe that Helios and Matheson Analytics is trading at a discount, leading to the gains that we’re seeing in the stock this morning. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:30), HMNY is trading at $0.014 per share after a gain of $0.0011 per share or 8.87% 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 to company to see what the next big threat is going to be, delisting or dilutive transaction. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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