Helios and Matheson Analytics Inc (NASDAQ: HMNY) has had a strong run in the market over the past few trading sessions, and those gains seem to be continuing this morning. Nonetheless, I’m here to tell you that, in my opinion, it’s time to take profits. Today, we’ll talk about:
- Why HMNY is up and why it’s time to get out;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why Now Is The Time To Take HMNY Profits
As mentioned above, Helios and Matheson Analytics has been on a relatively strong run in the market as of late, and those gains are continuing in today’s trading session. The reason for the gains is relatively simple. HMNY is losing a massive amount of money and was sitting on the brink of bankruptcy. However, last week, the company said that it had raised $65 million in funding.
When a company is dealing with such serious financial issues, and they announce that they’ve gotten their hands on a large amount of funding, it’s only natural to see gains. Nonetheless, when it comes to HMNY, I don’t see these gains lasting much longer.
The reason is relatively simply. At the end of the day, when the company acquired the majority stake in MoviePass just over a year ago and reduced prices dramatically, it set itself up for failure. The truth of the matter is that the service simply isn’t making money, instead, it’s losing it. In fact, since the acquisition, Helios and Matheson has raised hundreds of millions of dollars in an attempt to keep the service afloat. All of this money has flown out the window, leading HMNY to end up right where it started when it raised the money.
Now, there is one big question here. With HMNY having a proven ability to make massive amounts of money disappear, just how long will it take for the $65 million to turn to dust? The answer may shock you but I’m expecting for the money to be gone within 3 to 6 months.
What We’re Seeing From The Stock
While I believe that we’re nearing the end of gains in Helios and Matheson Analytics, the stock is headed up in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:45), HMNY is trading at $0.021 per share after a gain o f$0.0008 per share or 4.02% 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 newly-found funding and just how long it takes for that funding to turn to ashes like the hundreds of millions raised over the past year. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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