Please ensure Javascript is enabled for purposes of website accessibility

Why Helios and Matheson Analytics Stock Popped 41% Wednesday

By Rich Smith - Updated Apr 11, 2019 at 3:34PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

MoviePass tries to pull off an encore, but is anyone left in the theater to see it?

What happened

Shares of Helios and Matheson (HMNY 0.00%) caught an updraft today, rising all the way from $0.0088 per share to close at $0.0124 per share. That may not sound like much, but it worked out to a 40.8% gain for the stock.

Why did the MoviePass owner's stock take off? This morning, Helios and Matheson announced  a "new strategic direction" and a "new business model" emphasizing "self-generated revenues" among its three owned businesses, the MoviePass "theatrical subscription service," MoviePass Films production company, and Moviefone "multimedia media information and advertising service."

Check out the latest earnings call transcripts for companies we cover.

Empty theater with soda and popcorn on two seats

Image source: Getty Images.

So what

Helios was a little vague on the details, and even vaguer on numbers. For instance, it didn't say a word about whether the 3.2 million subscribers it apparently still had hanging around, attempting (against all hope) to watch a movie or two on a subscription that had lost most of its value, are still extant.

Still, assuming there are still any subscribers on the rolls, the general idea here seems to be that MoviePass will offer them additional movie viewings, on top of those for which they are subscribed, as long as those additional movies are ones that were produced by MoviePass itself. In this way, the company might be able to leverage its subscriber base (again, assuming there is one) to drive additional traffic to theaters, and thus "enhance box office results" for such films.

Now what

Will the plan work? I have my doubts. But whether I'm right or wrong about that, the upshot for investors is this:

MoviePass had its shot at turning movie subscriptions a viable business model. It failed. It lost a lot of money, got itself delisted from the Nasdaq (last month), and has been survived by companies like Sinemia and AMC that took MoviePass's original idea and made a better business out of it.

Now traded on the over-the-counter market, Helios and Matheson has to play catch-up in a game that it, itself, invented.

Whether it succeeds or not, that's just sad.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

AMC Entertainment Holdings, Inc. Stock Quote
AMC Entertainment Holdings, Inc.
$25.57 (15.28%) $3.39
Helios and Matheson Analytics Stock Quote
Helios and Matheson Analytics
$0.00 (0.00%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.