Helios and Matheson Analytics Inc (NASDAQ: HMNY) has been on an incredible run as of late, and as excitement continues to run rampant surrounding the stock, HMNY only continues to fly. In fact, in the past five trading sessions, the stock has grown by around 300%, and the end doesn’t seem to be nearing any time soon. So, what’s happening? We’ll get into that in a minute, but before we do, we’d like to extend a thank you to our partners at Trade Ideas for being the first to alert us to the gains yet again today. Currently (9:38), HMNY is trading at $36.00 per share after a gain of $8.12 per share (29.10%) thus far today.
Why HMNY Is Soaring
Helios and Matheson was a hit when the company announced that it had merged with RedZone Maps. However, that proved to be a drop in the bucket compared to the recent news that really sent the stock soaring. While we’ll talk about RedZone shortly, let’s talk about what’s really causing the movement right now; that is MoviePass.
For those of you who haven’t been following the story, HMNY acquired the MoviePass product back in August. During the acquisition, the product was not doing all that well. In fact, it only had about 20,000 subscribers, and for good reason. You see, the MoviePass product is one that gives subscribers the ability to go to the movie theater as much as they want for a monthly fee. However, before HMNY took the product over, that fee was a bit high for the average consumer to find interest in it.
However, when Helios and Matheson took the product over, they decided to revamp demand for the product by offering it at a lower price. In fact, they reduce the price by around 75%, dropping it from around $40 per month to only $9.95 per month. This ultimately made the product comparable in price to streaming services like Netflix and Hulu. The difference was that consumers could now actually go to the movie theater for this price and watch new releases.
This proved to be a hit, and why wouldn’t it? Think about it; for less than the price of an average single movie ticket, consumers now have the ability to go to the theater and watch as many movies as they want to watch. Why wouldn’t that grab their attention? Well, that’s exactly what it did. In just about a month and a half after acquiring MoviePass, HMNY announced that the subscriber base for the product had grown to more than 400,000 and continued to grow at a rapid pace. While we don’t have any hard numbers with regard to how many subscribers the service has today, I would venture to bet that the 400,000 number has likely doubled, considering the amount of time that has passed and the hype surrounding the service.
Ultimately, the massive growth in subscribers is what’s keeping investors happy, and for good reason. At the end of the day, more subscribers equates to more revenue, and more revenue will always make investors happy.
MoviePass Is Also A Great Thing For RedZone Maps
While MoviePass may seem to be the only hit product by Helios and Matheson Analytics at the moment, we can’t forget RedZone Maps. RedZone Maps is a map that is designed to show consumers where the highest crime potential is based on artificial intelligence. While the map has been slow to take off, MoviePass may be just what RedZone needed to grow legs and start running.
Think about it; HMNY now has the attention of a massive number of consumers through MoviePass. Like any smart company, it’s likely that the company will start cross-selling RedZone Maps with MoviePass, increasing the awareness of the product, and leading to strong sales. This brings us to our next topic…
The Making Of An HMNY Ecosystem
When we look at companies like Apple, one thing that pops out is the fact that these companies have created an incredible ecosystem of products. These products bounces off of each other to bring the ecosystem together. However, for this to happen, you have to have at least one smash-hit product. For Apple, that product was the iPhone. For HMNY, that product very well could be MoviePass.
By taking advantage of the audience the company is building surrounding MoviePass, Helios and Matheson Analytics now has the ability to bring more products into the ecosystem, building each off of the strength that is created through MoviePass. If done correctly, HMNY could quickly become one of the great technology enterprises of 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 explosive growth surrounding MoviePass and seeing if the company turns this opportunity into an ecosystem of products that will skyrocket the company to the top. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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