Helios and Matheson Analytics Inc (NASDAQ: HMNY) is having yet another strong start in the market this morning after the stock climbed by approximately 20% in the market yesterday. So, what’s happening? Why is it that the stock is up? Today, we’ll talk about what happened yesterday, what we’re seeing from the stock this morning, why this is likely a strong opportunity, and what we’ll be watching for with regard to HMNY ahead.
What’s Going On With HMNY
As mentioned above, Helios and Matheson Analytics is having a strong start to the trading session this morning after climbing in the market by around 20% yesterday. So, what’s going on? Well, Chet Lowe, the founder of MoviePass, was featured on CNBC yesterday. Of course, him simply taking the interview brought in a new round of buyers, sending the stock screaming for the top. However, this isn’t the only reason HMNY found its way up. A lot of the gains had to do with what Lowe had to offer in his statements.
In the conversation, Lowe defended the rationale behind the low monthly price of the service. While some argue that only charging $9.99 per subscription will lead to losses, Lowe believes that this is the right strategy to bring in the masses. Of course, this argument panned out well for HMNY.
Another interesting comment made by Lowe revolved around the potential for a streaming service. In the conversation, Lowe pointed to Disney’s streaming strategy. While he didn’t say that MoviePass would be working to become a streaming service, the conversation shifted, hinting that this is the direction that Helios and Matheson Analytics and the MoviePass team may be headed.
What We’re Seeing From The Stock As A Result
As mentioned above, HMNY is having a relatively strong start to the trading session this morning. While the gains aren’t quite as large as the 20% gains we saw last week, the trading in the pre-market hours is impressive, to say the least. At the moment (7:56), HMNY is trading at $12.75 per share after a gain of $0.42 per share (3.41%) thus far today.
Why We Have Bullish Opinions
At the end of the day, Helios and Matheson Analytics is stirring up quite the debate, and for good reason. With MoviePass (the company’s flagship product) having a fee of only $9.99 per month, many believe that the service can only lead to losses. The rationale here is simple. If MoviePass is paying full price for movie tickets used by subscribers, theater goers only have to go twice per month to generate a loss for the company. Of course, this has led to fear among the masses.
Nonetheless, there’s a bit more to the story. Addressing the contradiction directly, think about how often American’s actually go to the movie theater. While 13% or so will go once or more per month, the vast majority simply do not. So, chances are that those that don’t use the service more than once per month will outweigh those that do, creating a wash. However, the HMNY opportunity goes further than that. After all, MoviePass wouldn’t generate a loss with this alone, but it sure wouldn’t generate a profit either.
However, it’s important to remember that HMNY isn’t banking on the subscription fee alone. The company has been clear about their intentions to sell the data they generate to various parties, and this is the key value. Big data is overwhelmingly valuable, and Helios and Matheson Analytics is generating massive amounts of data through MoviePass. This could prove to be a main source of profit down the line.
Another factor that’s worth considering here is the conversation that Lowe had on CNBC yesterday. With his hint toward providing a streaming service, the opportunity could become a massive one. Sure, the company would be behind the curve. However, at the end of the day, HMNY would offer a streaming service like no other, likely allowing their subscribers to not only stream content, but also to go into the theater, giving it a unique competitive advantage. While this is just speculation at this point, I wouldn’t be surprised to see news of a streaming service coming down the line relatively soon.
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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 watching the continued evolution of MoviePass and excited to follow any news that is released. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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