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Will Helios and Matheson Analytics Inc (NASDAQ:HMNY) Grab Movie Magic?

Helios and Matheson Analytics Inc (NASDAQ:HMNY)

Helios and Matheson Analytics Inc (NASDAQ:HMNY)

Helios and Matheson Analytics Inc (NASDAQ:HMNY) gapped up to open on Tuesday morning, reached above $3.80, then retreated throughout the day and into today’s session to trade in a tight range around $2.60. Volume has been heavy – almost double the stock’s daily average.

Helios and Matheson Analytics Inc (NASDAQ:HMNY)
One month stock price chart for HMNY

The market is responding to the company’s announcement that it has bought a 51% majority stake in MoviePass, a subscription-based service for movie theaters led by former Netflix executive and co-founder Mitch Lowe. Helios and Matheson Analytics Inc (NASDAQ:HMNY) paid $27 million for the equity.

The two New York city-based companies simultaneously launched a monthly subscription service with a price-point at $9.95. The subscription entitles the subscriber entry into one movie every 24 hours at any of the participating 3,700 U.S. movie theaters. Prior to the deal, subscription plans from MoviePass ranged anywhere from $14 to $50 per month.

Lowe served as the vice president of business development and strategic alliances for Netflix, from 1998 to 2003. He also held executive positions at RedBox Automated Retail LLC from 2005 to 2011, including, for four years, as the company’s CEO. In June of 2016, Lowe was installed as CEO at MoviePass.

The subscription plan is one facet of the company’s strategy to increase movie attendance which has been trending downwards along with the popularity of shopping malls. Enticement include reserved seating, pre-ordering drinks and food, and free large-screen viewing of popular TV shows throughout the day. The new approach was designed to broaden the demographics of movie attendees. Currently over 70% of movie theater viewers are millennials. By offering a more upscale service, Helios and Matheson Analytics Inc (NASDAQ:HMNY) hope to attract a more mature consumer.

One year ago Helios and Matheson Analytics Inc (NASDAQ:HMNY) stock was trading above $13. For the past few months HMNY shares have been trading between $2 and $3. YTD the stock is down only 10% but for the year HMNY shares are down over 67%. Interested investors or traders should note that 15% of the stock’s float is held by short-sellers.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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