Helios and Matheson Analytics (HMNY) Stock: Trader’s Dream = Investor’s Nightmare!

Helios and Matheson Analytics Inc HMNY Stock NewsHelios and Matheson Analytics Inc (NASDAQ: HMNY) had an overwhelmingly strong day in the market yesterday, closing the day off with gains of 26.70%. However, this morning in the pre-market, the stock has not only given up the gains, but it has fallen below the starting point. So, what’s the deal? Today, we’ll talk about:

  • Why HMNY is a trader’s dream and an investor’s worst nightmare;
  • what we’re seeing from the stock today; and
  • what we’ll be watching for ahead.

Why HMNY Is Great For Traders But Bad For Investors

Helios and Matheson Analytics is a company that started as a data analysis company, but with the acquisition of a majority stake in MoviePass, it became a company in the entertainment space. While the MoviePass acquisition excited investors and sent the stock screaming for the top, the truth of the matter is that the service has only led to losses. That’s why the stock that pumped up to nearly $40 per share as MoviePass grew is now sitting at around $0.30 per share.

The problem is that when HMNY took over MoviePass, they greatly reduced the cost of the service, giving users the ability to go to the movie theater whenever they’d like for about $10 per month. Since MoviePass pays the full price for movie tickets purchased by its subscriber, this has opened the door to tremendous losses.

Nonetheless, the service continues to grow in popularity, making this an interesting play. On one side of the coin, the company’s subscriber base is growing. On the other side of the coin, so too are losses! So, this is leading to a whirlpool of emotional trades. Considering the dramatic growth in users, HMNY has built some serious excitement and now has tons of investors watching closely. Therefore, when something good happens, the stock skyrockets. However, the gains only last for a session or two before the stock generally falls below the point that it started at. These wild swings are a great thing for traders.

On the investor side of the coin, however, Helios and Matheson is about as bad as it gets. The company is far from generating profits, burning through around $22 million a month, and reaching for straws, trying to find a way to turn MoviePass into a profitable venture. Therefore, in a long-term sense, HMNY may be better shorted than purchased. At the end of the day, the company’s flagship product, MoviePass, is a loss-generating machine, and the stock will likely continue on the downtrend overall until this is fixed.

What We’re Seeing From The StockĀ 

As mentioned above, Helios and Matheson Analytics had a strong day in the market. However, with this stock, we’ve learned that what goes up will come down, generally within a session or two, and that’s exactly what we’re seeing. In fact, at this point, the stock is trading far below the opening price yesterday. Of course, our partners at Trade Ideas were the first to alert us to the declines. Currently (8:19), HMNY is trading at $0.30 per share after a loss of $0.15 per share (33.32%) 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 goal of bringing MoviePass to profit. While we don’t believe the company has what it takes to do so, anything can happen in the market. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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