(Updated to clarify position -and date of SEC filing 8/12 9:21 AM)
An alert reader of this blog sent me an interesting SEC filing tip this week. Giri Devanur a very respected business leader has taken a substantial position in HMNY – The SEC filing shows Devanur personally took out a position of over 5% of the company dated August 2nd.
(Obviously this position has been diluted from HMNY’s ATM action and shares dumping into the open market daily – it is possible that Devanur has bought more shares since the filing as he is not required to update the filing immediately after the initial filing of his large position)
Devanur is the former CEO of NASDAQ listed Ameri100 – and he is now the CEO of a well-funded blockchain startup company called Runs.com. Devanur has an impressive resume and has built prior companies from the ground up to over 1000 employees.
Very interestingly– Devanur’s Ameri100 company was in a similar line of business as HMNY, prior to the Ted Farnsworth takeover of HMNY and their subsequent risky investment into Moviepass.
Ameri100 does high-end consultancy IT work, they are mostly focused on SAP installations- but the also do other work – including big data analytics like HMNY was doing on a consulting basis prior to Farnsworth merging Zone Technologies into HMNY, and then going after Moviepass.
This is important because there is a very interesting link between Devanur and the current CIO of HMNY, Pat Krishnan
What you may NOT know is Pat Krishnan was the CEO of HMNY prior to the arrival of Ted Farnsworth. Krishnan actually takes credit on his linked in profile for acquiring Farnsworth’s RedZoneMaps company. Stating on his profile that as CEO of HMNY he: “Provided strategic direction for the company by acquiring a crime mapping and navigation company called RedzoneMaps. Provided technology and marketing direction for RedzoneMaps.Ran the analytics and AI team for RedoneMaps to provide Predictive capabilities for CrimeMapping.”
The RedZoneMaps and Farnsworth mashup with HMNY is likely a decision Krishnan may be regretting now that HMNY’s value has been obliterated by Farnsworth’s big gamble on Moviepass. Hard to say for sure, as we don’t know yet how this story of HMNY and Moviepass will end. But it can’t look good to Krishnan’s stock holdings of HMNY at the moment.
Krishnan and Devanur happen to be “connected” on LinkedIn and have very similar overlapping experiences and resumes. Both now reside in New York/ New Jersey area. It’s pretty obvious that these two individuals are very likely to know each other. These circles are actually pretty small, particularly at the CEO levels. There is almost zero chance that these guys don’t know each other.
I am not suggesting any insider trading here. I am simply suggesting that it is quite possible that Krishan and Devanur know each other, and there is at least a strong possibility that Devanur’s due diligence when taking a large position in HMNY included reaching out to his old colleague Krishnan to see how things were going with HMNY.
And I would say it is at least possible that Krishnan explained to Devanur that the stock of HMNY has been beaten down, but that Krishnan still believes in the company, and feels that the stock represents a good value. All of this is speculation on my part here of course.
All we really know for a fact is that a respected business leader (Devanur), who has a terrific resume and background and is connected to the CIO and the xCEO of HMNY has decided to make a big buy in HMNY with his personal fortune. That in it of itself is an interesting move. Devanur is an important and very busy guy, I seriously doubt he is trolling stock boards looking for investment opportunities like a normal retail investor. To go through the hassle of filing with the SEC, and buying a big stake in the company, there has to be more than a simple retail buy of the stock going on here.
When a prior CEO of a publicly traded company, who is now a respected leader of a newly funded startup, takes a big position in a 3rd party company, something is up. What exactly it is, and why he did it, we don’t yet know.
I have reached out to Devanur to find out what his interest is here in HMNY, and why he took the large position he did in the company. I will let you know what I hear- if I get any comment back at all.
Here you can see the screenshot showing Devanur and Krishnan connected on LinkedIn – I am connected with Krishnan – and Devanur is also connected to Krishnan – Making us a “mutual connection”.
Standard disclaimer- this article does not mean HMNY is a buy here. This is a very risky stock. You could lose all your money invested here. This stock and company could go BK. Do not invest more than 2% of your net worth here.