Hmny stock price11/6/2023 The company to date has done a terrible job at selling the story. Why? Because I expected the company to sell the story better and raise capital at much higher valuations. This is why I calculated capital needs of $1B and significant additional dilution yet I was long. Reset to Sell the Story: My bull thesis assumed that avid users would sign up first and the company would lose a ton of money in the first few years. If MoviePass trades on its own as a publicly traded company, this will give the perception of permanence, resulting in even faster growth, but less abuse.Ħ. The thinking goes that "if I'm paying upfront for an annual plan, I better watch all the movies I can in month one, because this company may not be around in month two". They assume MoviePass will go bankrupt very soon so this either prevents them from signing up or causes them to abuse the service upfront if they do sign up. Perception of Permanence: Many potential or current customers of MoviePass just cannot believe how good the deal is. Financial Media Coverage: Once MoviePass trades as MoviePass, this company will receive significantly more coverage in financial media, increasing demand by all investors.ĥ. In other words, the stock will trade higher than it otherwise would because a whole new class of casual retail investors would be able to easily find the opportunity.Ĥ. No matter what the price, MoviePass will earn a higher premium than HMNY. When MoviePass actually trades as MoviePass with its own ticker symbol, additional retail demand will occur. The Name: This is the most obvious problem but not the most important. This further reduces demand for HMNY stock.ģ. NDA Trade Restrictions: Also through the grapevine I have learned that as part of the MoviePass private investing opportunity, potential investors must sign an NDA which subsequently restricts them from buying HMNY in the open market due to the insider knowledge they will attain. What institution would invest in HMNY if there was also the possibility of buying MoviePass stock privately? All of this brings confusion regarding questions of corporate leadership and divides demand between HMNY and MoviePass.Ģ. If an institution wants to invest in MoviePass, who do they contact? HMNY or MoviePass? Which CEO do they meet with? Ted Farnsworth or Mitch Lowe? Who is really in charge? Through the grapevine, I have heard that MoviePass is still actively soliciting investors privately. Clarity on Corporate Structure: first and foremost, the #1 problem with this proxy investment is that we have two corporations with effectively two co-CEOs. Let's talk about the problems of a proxy investment in this particular case and the critical importance of a corporate restructuring:ġ. In fact, many disciplined investors actually have a rule that they never invest in a proxy. I've interviewed dozens of high net worth investors including three hedge fund managers. I also warned that there was one significant caveat: investing via proxy. In my original bullish article, I wrote about the four pillars of a great investment: Brand, Industry, Management, and Moat. The subscriber count continues to grow rapidly while the company brings on revenue sharing partners far sooner than I would have ever expected. By all accounts, the math of the business model is going as I always thought it would with 2.6 movies per month seen on average in Q4 and probably somewhere between 2.1 to 2.3 movies in Q1. MoviePass is a $10B to $50B opportunity that will require at least a $1B capital investment. Below is my take on what's really going on with HMNY and MoviePass.Īs I previously wrote about, I suggested that the math of the business model should not be a concern at this time. The stock first settled in around $4.50 after that offering but then more recently has spiraled downward with no end in sight. It has been a long difficult slide for Helios & Matheson Analytics ( OTC:HMNY) since its most recent $105M financing.
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