Shares of Helios and Matheson Analytics (HMNY) soared 31% on Monday -- opening sharply higher on Tuesday -- following the launch of a new promotion on Friday and an SEC filing showing that Verizon (VZ -0.53%) now has a 9.3% passive stake in the controlling stakeholder in MoviePass. Neither event seems worthy of the rally that has seen the stock soar more than 50% over the past five trading days.

Don't get me wrong -- as a recent shareholder, I'm relishing the upticks. However, in the spirit of fair play, I think even speculative pops deserve to be earned. Helios and Matheson hasn't earned the past few days of heady gains.

Original MoviePass landing page showing $9.95 a month for daily movie screenings.

Image source: MoviePass.

Oath of allegiance 

Let's start with Verizon. This would be a pretty big deal if the country's leading wireless provider just casually snapped up a nearly 10% stake in the growing yet deficit-saddled multiplex smorgasbord operator, but that's not the case. Helios and Matheson is issuing these shares -- 2.55 million and another 2.55 million in the form of exercisable warrants that are part of the total 5.1 million share count -- as part of the Moviefone purchase it completed on the same day.

The acquisition of Moviefone from Verizon subsidiary Oath was for an undisclosed combination of stock and cash, and clearly this is part of that transaction. Verizon is locked into owning the shares until next April, something it wouldn't be doing if it was actually paying money for the stock. 

Having Verizon as a sizable investor is not a bad thing. There could be some pretty tantalizing partnerships if they should decide to hook up. Verizon could follow its peers into including access to a third-party entertainment service for its wireless subscribers. However, the stock moving on this news -- when this is just part of the deal announced two weeks ago -- doesn't make a lot of sense.

The new MoviePass promotion makes even less sense as a catalyst for a rally. MoviePass is teaming up with Clear Channel for a $29.95 plan that includes a three-month trial of iHeart Radio's All Access streaming music service and three months of a limited MoviePass membership. This is a "limited" MoviePass subscription because it caps the number of monthly movies at four, unlike the previous buffet that grants card-carrying members access to as many as one single traditional screening a day for $9.95 a month. 

The new promotion is going to be a non-starter for most potential registrants, especially if they have no interest in iHeartRadio's All Access. Unfortunately for them, the limited MoviePass membership tethered to Clear Channel's on-demand music platform is the only way to sign up for MoviePass at the moment. 

Reel housewives

MoviePass is in a tough spot, here. It's paying multiplex operators a lot more for the tickets it has to buy than the $9.95 a month it's collecting from its more than 2 million MoviePass members, and some of those early birds are on even cheaper annual plans. Even with some of the smaller chains conceding to give MoviePass a piece of the action at the box office or on concession stand sales, the previous model doesn't have a clear path to profitability. 

MoviePass is responding by trying to flag some of its most active users. It's been requesting that some members submit photographs of ticket stubs before completing their next screenings, a move to combat fraud. Some MoviePass members are buying tickets on an almost daily basis to score multiplex reward points without even going to the movies they're purchasing, forcing MoviePass to eat the cost. Other subscribers are using the MoviePass debit cards for other theater purchases. There are also ethical MoviePass members that just love seeing movies, ultimately a heavy addiction for MoviePass to subsidize at a mere $9.95 a month.

They key here will be what becomes the standard MoviePass offering for new subscribers once this seemingly dead-in-the-water Coachella promotion with iHeartRadio runs its course. Will MoviePass be back with the daily smorgasbord plan that helped take it from 20,000 accounts to more than 2 million in six months? Will it roll out a stand-alone limited membership to keep viewings in check, and if that's the only plan it offers, how long will it grandfather in pre-April 13 signups before it caps them, too? The party may be over the moment that usage caps and throttling measures make the process even more cumbersome, but that was always going to be the sticking point in making this seemingly unsustainable model work.