Helios and Matheson Analytics Inc (NASDAQ:HMNY) business was once an investors’ favorite. However, few tinkering on their business plan leads to a drastic downturn that hurt revenues. Subsequently, the company’s stock took a considerable beating that seems to linger for long.
The bane of Helios and Matheson Analytics’ lies in MoviePass, a majority-owned subsidiary by the company. Mid this year, MoviePass introduced a higher pricing model for their content subscription model. Further, the firm increased the blackout period for films just hitting the market. As such, the firm experience huge walkouts by the subscribers.
Furthermore, the firm experienced problems when customers pay for the subscription. Notably, customers could not access the tickets they had reserved. In explanation, MoviePass said it lacked the money to pay theatres. As such, Helios and Matheson had to shoulder the responsibility by virtue of being the parent company.
However, the firm introduced new pricing plans early this month. Particularly, Helios and Matheson announced that MoviePass would introduce a cheaper 3-tier pricing structure. Further, the plan will offer three movies a month plus other offers to bring customers back.
The new pricing structure led to Helios and Matheson’s stock jumping 4.9% in pre-market trade. This is quite some good positive news from the dramatic decline the stock experienced from mid-July to mid-August.
Interestingly, the fall was so dramatic that it hit the company’s CEO hard. Ted Farnsworth, the CEO of Helios and Matheson (H&M) lost almost all of his worth in stock since the fall. Notably, the stock was grossing at more than $2,800 in early December last year.
At this time, Farnsworth’s compensation was worth over $7 million. However, the stock fell up to less than $50 since the dramatic fall.
H&M’s stock is still trading in the red since mid-October. Looking at some indicators shows that there is little momentum in the stock. Particularly, the relative strength index (RSI) is still in the low strength region since August.
Typically, the RSI helps investors estimate the future direction of the stock. For H&M, the RSI reading stands at 22.64. Usually, values below 30 show weak price action. As such, it is likely that the stock will take more time before it picks up.
To better gauge, the strength of the stock, the Commodity Channel Index (CCI) gives a more comprehensive perspective into the strength of the stock. Usually, values close or equal to 100 show that the stock is grossing at above its average price. For values close to or equal to -100, the stock is grossing at way below its average price.
Further, surges above 100 indicate high price actions while prices at -100 show there is very weak price action. For H&M’s stock, the CCI reading stands at -53.75. As such, it indicates that the stock is heading towards weak price action.
Besides, the Williams Percent Range (Williams %R) further helps to ascertain the future direction of the stock. For values below -80, it indicates an oversold situation for the stock. The Williams %R for the stock is -65.96. This means that the stock is oversold. Therefore, such information can help the investor decide when to buy the stock.
The future for the firm’s stock still looks bleak in the sense that both the 200-day and 50-day moving averages are flat. Unusually, both averages bottom out at the same price as the current share price for the stock at $0.0161.
The story is even bleaker in the Q3 results for 2018. In the results, the firm reported losses in both revenue and profits.