Helios And Matheson Investors Take Profits Following Added Stake In MoviePass

Helios and Matheson Analytics Inc HMNY stumbled Wednesday on a Citron Research short call, but not enough to break its month-long rally. The stock closed up nearly 18 percent, partly sustained by the company’s affirmed plans for a MoviePass IPO.

But investors, perhaps mindful of the 40-percent downside predicted by Andrew Left, soon saw an opportunity to cash out. After-hours reports of an increased stake in MoviePass — a $1.5 million investment bringing ownership from 53 percent to 53.7 percent — prompted a sharp sell-off.

The additional purchase followed evaluation of “the significant and rapid increase in the number of MoviePass subscribers since MoviePass announced its new $9.95 per month subscription fee on August 15,” according to the company press release. Subscriptions had risen from 20,000 to 400,000 in that time.

The 8-K filing revealing the stake, dated Oct. 4, also reported a new investment option agreement granting Helios and Matheson the opportunity to buy another 8.7 percent of MoviePass shares for a $20 million sum.

The stock had fallen as much as 27 percent in futures trading and, at time of publication, was set to open down 8.5 percent off Wednesday’s closing value of $32.90.

Update: The stock was down more than 25 percent at $24.26 in mid-day trading.

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