Technology Stocks

Helios & Matheson Analytics Inc. (NASDAQ:HMNY), The Parent Of MoviePass, Plans Reverse Stock Split Of About 1 For 500 Shares

Helios & Matheson Analytics Inc. (NASDAQ:HMNY) is trying to gain lost ground, the stock dipped 0.91% in the last trading session and closed at $0.0109 in the previous trading session. Helios & Matheson has been struggling since July with their stock closing below $1 which is the threshold for exchange listing. The company whose Moviepass film subscription business has not been doing well and the may be in danger of getting delisted from the Nasdaq market.

Shareholder meeting

As a result of this position MoviePass’ parent company Helios & Matheson has set a date for a scheduled meeting on 15 March 2019 for their latest reverse-stock split plan that will help prevent them from getting delisted. In a regulatory filing, Helios and Matheson has organized and invited its shareholders to a meeting to vote for approval of a reverse split of their stock for a 1-for-2 shares ratio up to 1-for-500 shares

Declining stock

Since last July, Helios and Matheson’s stock has been declining owing to their struggling subsidiary Moviepass. Since August last year their stock has closed below five cents on every single day, and during the previous closing, it had a quote of around 1 cent.

The reason that has been behind the declining of the stock has been their struggling affiliate MoviePass that they have failed to make profitable and has been consuming a lot of cash. In 2017 Helios and Matheson bought a majority stake in the movie subscription program, and they immediately reduced the cost of a subscription to $9.95 per month which allowed subscribers to watch a film of their preference each day.

The move did not seem to be tenable which prompted the company to revise their offering terms by limiting the access to better films as well as restricting subscribers to special showings.

The company already has implemented the reverse 1-for-250 stock split that raised objections from a section of shareholders. The company believes that the reverse stock split will increase the market price of their common stock adequately to meet the minimum bid price prerequisite. So far they have sold convertible notes and preferred stock to raise some funds.

Barbara Underwood, the Attorney General of New York, has instituted a securities fraud investigation into Helios and Matheson.

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