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Helios and matheson stock 201711/19/2023 In addition, from Mathrough April 12, 2018, the Company advanced a total of $35,000,000 to MoviePass (the "Second Advance"). Note that HMNY's stake was further increased to 91.8% as of April 2018. Pursuant to the March 2018 Agreement, MoviePass also agreed to issue to the Company, in addition to the March 2018 MoviePass Purchased Shares, without payment of additional consideration by the Company, for purposes of anti-dilution, an amount of shares of MoviePass Common Stock that caused the Company's total ownership of the outstanding shares of MoviePass Common Stock (excluding shares underlying MoviePass options and warrants), together with the March 2018 MoviePass Purchased Shares, to equal 81.2% as of March 8, 2018. On March 8, 2018, the Company entered into a Subscription Agreement with MoviePass (the "March 2018 Agreement"), pursuant to which, in lieu of repayment of the Advance, MoviePass agreed to sell to the Company an amount of MoviePass Common Stock equal to 18.79% of the total then outstanding MoviePass Common Stock (excluding shares underlying MoviePass options and warrants) (the "March 2018 MoviePass Purchased Shares"), based on a pre-money valuation of MoviePass of $240,000,000 as of December 31, 2017. Moreover, keep in mind that as of December 31, 2017, HMNY only owned 62.4% of Moviepass, so HMNY's financial statement are only showing a proportional share of Moviepass's losses (see below). How can Ted say the negative cash flow was only $10 million when the cash flow statement from operations says negative $27 million? Farnsworth told BI the "gross loss" was really only $10 million cash, and the rest was in "derivative accounting." Helios and Matheson reported a loss of $150.8 million for the last financial year, compared to just $7.4 million in 2016. Lo and behold, in this Aparticle published in The Verge ( MoviePass auditor has doubts about Company's Business Model after significant losses), the CEO of Moviepass, Ted Farnsworth, is quoted as saying: Turning to the cash flow statement, net cash used in operating activities was negative $27 million. However, there is a lot of noise in the financial statement due to the debt issuance and warrants. If we turn to the income statement, HMNY had a $56 million loss from operations in FY 2017. It was one of the worst business models I have ever seen and I never bought the nonsensical arguments that it behaved like a gym membership. Isn't it morally abhorrent that a guy like Ted Farnsworth has made millions dollars in executive compensation for incinerating shareholders' capital?Īs I noted in the Octoand continued to mention in a few other follow up pieces, in my mind there was a 95% to 99% probability that this a zero. However, even though it was legal, they took advantage of our capitalist system solely for their own personal benefits including compensation and the PR limelight. They hired fancy lawyers that spelled out the risks in excruciating details, so they covered themselves from a blockbuster wave of lawsuits. The part that bothers the most is that Helios and Matheson isn't do anything wrong from a legal standpoint. At this point, the horse left the barn in October 2017, so it bad that so many retail readers got so badly hurt. Let me be clear, I never shorted HMNY and never bought any put options on this stock, so this was purely an academic exercise and a call that could have saved retail readers a lot of losses and exasperation. The reason I decided to publish it was because I realized that there was a strong probability this stock was a zero (or close to it) and a lot of retail investors might get enchanted and bewildered by hype of this sexy story.Īs you can see, shares have traded from $29 to yesterday's closing price of $2.55 (or down 91%). As the market opened that day, and shares started to drift lower with increasing volume, I decided to write " I've Seen How This Movie Ends"(published that same day, Oct. That morning, in pre-market trading, HMNY shares were trading between $28 and $30 and there was a lot of volume. 12, 2017, I published an extraordinarily bearish article suggesting to my Marketplace readers, unequivocally, (not merely suggesting) that any readers long should immediately sell shares of Helios and Matheson ( OTC:HMNY) and consider shorting it.
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