Helios and Matheson Analytics Inc (NASDAQ: HMNY) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced that it is cracking down on fraud, cancelling several member accounts in the process. Ultimately, this is leading to excitement among investors, sending the stock on a run for the top. Today, we’ll talk about the membership cancellations, what we’re seeing from HMNY, and what we’ll be watching for ahead.
HMNY Gains On Membership Cancellations
As mentioned above, Helios and Matheson Analytics is having an overwhelmingly strong start to the trading session this morning as news breaks that the company is working to crack down on fraud. It all started with various posts across social media with ex-members of MoviePass complaining about the cancellation of the service.
Essentially, HMNY cancelled several MoviePass subscriptions with no warning. The subscriptions were cancelled as the result of fraud of the service. Essentially, HMNY believes that these members were selling tickets and printing multiple MoviePass cards to allow their friends and family to use the service under a single subscription.
Ultimately, Helios and Matheson Analytics as well as MoviePass are defending their actions to cancel fraudulent accounts, explaining that with the growth of the member-base, this fraud could really damage the bottom line. Therefore, it’s important that they crack down sooner rather than later.
When canceling the memberships, MoviePass sent users emails saying that their services were cancelled effective immediately as the result of terms-of-service violations. Also, the email informed these users that they would no longer be allowed to purchase a MoviePass subscription as they were banned permanently from the service. Ted Farnsworth, CEO of MoviePass’ majority owner, HMNY, had the following to offer:
The thing is, with the size we’re getting to now we have to crack down or these people will ruin it for everybody… I mean, we’ve been out to theaters in [New York City] and watched people do it.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the market. In this particular case, the news surrounding Helios and Matheson Analytics proved to be positive. After all, by cracking down on fraud, the company will ensure that added expenses due to fraud will be held at a minimum. So, it’s no surprise to see that the stock is making a run for the top this morning. At the moment (8:24), HMNY is trading at $8.03 per share after a gain of $0.30 per share or 3.88% 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 continued growth of MoviePass and continued efforts of the company to ensure that the service becomes a profitable and long-lasting one. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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