Helios and Matheson Analytics Inc (NASDAQ: HMNY) is a stock that we have followed for some time now. With the stock now trading at exceptional lows, many are wondering if now is the time to get in. However, I’m here to tell you that there will likely never be a good time to get in on this one. Today, we’ll talk about:
- Why you should stay away from HMNY;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why You Should Stay Away From HMNY
Before we get into the details here, let’s do a quick recap of why Helios and Matheson Analytics hit the limelight in the first place. In August of last year, the company acquired a majority stake in a service known as MoviePass. The service would give consumers unlimmited access to the movie theater in exchange for just $9.95 per month.
This purchase led to serious excitement about the stock. That is, until investors started to see the losses it was generating. Today, just over a year later, the company has lost more than $100 million that it has shelled out for movie tickets for its subscribers. In fact, losses have grown so wide that in a last ditch effort to protect the company, HMNY recently announced the spin off of MoviePass.
Even now, with MoviePass gone, it’s not a good idea to get in on the stock. The reason is simple. The company already spun off its only positive product, Red Zone Maps. It’s got nothing left but a management team that has driven it into the dirt. At the same time, the company is under investigation and an indictment may be closer than you think.
An investigation was recently announced by the Attorney General of New York. Attorney Generals have different rules. In particular, unlike the SEC, they don’t have to show intent in wrong doing. Also, with the Martin Act at the AG’s disposal, an indictment wouldn’t be all that hard in this case. Sure, HMNY said that without raising funds it wasn’t capable of keeping the business alive, but the Martin act was designed to protect investors, even when thinly veiled disclaimers are involved in investments. Ultimately, this early 1900’s act could be what leads to an indictment for HMNY and its leadership. Should this take place, the minimal chance of recovery that may exist today will all-but disappear.
What We’re Seeing From The Stock
After a deep dive in the market yesterday, Helios and Matheson Analytics is seeing a small movement upward at the moment. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:00), HMNY is trading at $0.17 per share after a gain of $0.0001 per share or 0.59% so 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 continued work to try and recover and the New York AG’s investigation into whether or not securities fraud took place. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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