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Helios and Matheson Analytics Inc. (NASDAQ:HMNY) Down on Subscriber Math

Helios and Matheson Analytics Inc. (NASDAQ:HMNY)

Helios and Matheson Analytics Inc. (NASDAQ:HMNY)

Shares of Helios and Matheson Analytics Inc. (NASDAQ:HMNY) continued their long slide even as the company announced massive subscriber growth in its wholly owned subsidiary, MoviePass. Shares of the company fell 15.92% in Monday’s trading session to end the day at $9.03 a share.

Helios and Matheson Analytics Inc. (NASDAQ:HMNY)

HMNY Stock Performance

Monday’s sell-off capped yet another poor showing in the market on the back of positive news. Over the past month, the stock has shed more than 60% in the market, as the downward spiral shows no signs of slowing down.

Helios and Matheson Analytics Inc. (NASDAQ:HMNY) shares experienced a breathtaking spike in revenues after MoviePass announced an 80% reduction in its monthly subscription fee. The reduction led to an increase in the number of subscribers from 20,000 to 600,000 in less than two months.

Investor confidence on the stock has since taken a hit on concerns that MoviePass’ business model could drain a lot of capital in the near term. The Helios and Matheson Analytics subsidiary lets members watch one standard movie screening per day at any theater that accepts its debit card.

Profits Concerns

The math behind the $9.95 a month plan continues to arouse concerns as the company stands to lose money should subscribers watch more than one movie a month.

Confusion over how Helios and Matheson Analytics Inc. (NASDAQ:HMNY) will be able to generate profit under the current business model is another headwind that continues to plague the stock. A few weeks ago MoviePass CEO Mitch Lowe, said they will be able to break even on current subscribers buying at least one movie ticket. Fast forward, the tune has changed, and the executive insists that users may have to buy multiple tickets.

In what many observers believe is an attempt to prevent a further slide of the stock, Helios and Matheson Analytics Inc. (NASDAQ:HMNY) CEO has hinted at the possibility of generating some value from subscriber data.

“When you apply computer science and machine learning to an industry that we believe has lacked significant innovation, useful patterns start to emerge,” Helios and Matheson CEO Ted Farnsworth says in last week’s press release. “More subscribers mean more data.”

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: Marc has a degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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Marc has a degree in economics and a MSc. in Finance. Marc worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

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