What happened

Shares of MoviePass owner Helios and Matheson (HMNY) stock are up as much as 19% in afternoon trading today, returning to a share price of precisely $0.02 as of 12:15 p.m. EDT -- and you won't believe why.

"MoviePass owner Helios and Matheson" ... may not want to own MoviePass anymore.

Cartoon pirate forcing businessman to walk the plank

Surprise! Helios and Matheson prepares to toss MoviePass overboard. Image source: Getty Images.

So what

In 2016, data analytics company Helios and Matheson reported a $7.4 million net loss on $6.8 million in revenue -- admittedly, not a great result. But halfway through 2017, the company revamped its business model by acquiring a majority stake in all-you-can-eat movie subscription service MoviePass, and by the end of that year, Helios's losses had ballooned to $146 million -- which kind of suggests that buying MoviePass was a mistake.

Seeking to correct that error, this morning Helios and Matheson announced it's exploring a plan "to spin off MoviePass ... as [a] separate public company." Presumably, absent additional changes to the business model, this would still be a money-losing company. But separated from Helios, MoviePass' difficulties would no longer taint the results of its current parent -- or as CEO Ted Farnsworth put it: "The market perception of HMNY might benefit from separating our movie-related assets from the rest of our company."

Now what

Assuming this plan is followed to completion, does it make Helios and Matheson stock a "buy?"

In a word: No. And there are two reasons for this. First and foremost, even after spinning off MoviePass, Helios envisions "HMNY retaining control of MoviePass Entertainment upon any such distribution." Thus, while separated from MoviePass in the public's perception, Helios would presumably still be responsible for MoviePass' continuing losses.

And second -- to be blunt, Helios and Matheson was never that great of a business to begin with. Helios may not have been losing "$146 million a year" before MoviePass, true. But it was still losing $7.4 million on $6.8 million in revenue.

Simply put, Helios wasn't such a great company before buying MoviePass. I see little reason to expect it to become a great company after spinning off MoviePass.