We have come up with a great list of catalysts that could impact HMNY – Moviepass, one significant catalyst that was not on the list was the much-needed change of the company name of and ticker symbol from Helios and Matheson and HMNY to Moviepass and MVPS or some other equivalent ticker that really works for retail investors.
I had a very real conversation with a couple of friends who told me there is no way they would buy a stock called Helios and Matheson, with some weird symbol called HMNY, to them it sounded like a total fraud. Even after my impassioned explanation for why we were only temporarily stuck with that horrible sounding name, it was enough of a red flag for these two guys to say no way in hell. And of course after the stock swooned to its new low levels, I take no end of grief for recommending it to them, and they take joy in being “right” about that stupid name.
I have known that the name was a problem, but I did not really realize how big of a problem it was until after I read this article about Crispr Therapeutics AG with ticker symbol CRSP.
If you have not heard of CRISPR or the science behind it, I highly recommend getting familiar with it. I learned about CRISPR listening to this Freakonomics podcast, and from my daughter who is a Biochemistry student at the University of Washington. I know very little about this field, or the investment opportunity here, other than to know it is a revolutionary new technology and is likely going to be the single most important discovery for curing thousands of diseases within the next decade or so. A short description is they have found a way to effectively edit human DNA to cure disease. And I am talking about major diseases that impact almost every single person on the planet in one way or another, cancer, blood diseases etc etc. The point here is that CRISPR is a very big deal, and many people know it is a big deal.
So it was with great interest when I found out that the name and symbol ticker for Crispr Therapeutics AG – (CRSP) was the most highly valued company in this new field with a valuation about 2 times its nearest competitor. The next competitor is named Editas Medicine symbol (NASDAQ:EDIT). Not a horrible name, and they do play on the idea of what the technology does, with the EDIT ticker. But that name feels a lot more like a Sinemia than a MoviePass, maybe it is even worse than Sinemia, which I still think sounds like something you would pick up eating spoiled meat. Anyway, the point is that names matter, and they matter a lot for valuation particularly with retail investors.
From Motley Fool:
What’s in an acronym?
More than a few analysts are convinced that CRISPR stocks by any other name just don’t smell as sweet to retail investors. Results of a Twitter poll conducted by Brad Loncar showed 86% of the independent analyst’s followers think name recognition is the main force driving Crispr Therapeutics’ stock past its peers.
Apparently, this phenomenon comes from something called fluency. And there is a lot of scholarly literature about this. One of the most recent studies from Amsterdam – School of Business and Economics suggests.
“A novel strand of research shows that fluency plays an important role in the stock market. Companies with short, easy to pronounce names yield higher first-day returns on IPOs (Alter and Oppenheimer, 2006), and exhibit significantly higher valuations, breadth of ownership, and share turnover (Green and Jame, 2013). Similarly, stocks with tickers that are actual words in the English language exhibit higher liquidity and lower spreads (Anderson and Larkin, 2012). The dynamics that drive these effects, however, are still unclear.”
The study goes on to indicate the more noise around a stock the bigger the impact of fluency seems to be.
I guess this is obvious, but I feel compelled to point it out. Helios & Matheson is A) not a short name B) not easy to pronounce C) not actual words used in the English language.
Let’s be honest, the name Helios & Matheson sucks, and it sucks badly. And the ticker HMNY might even be worse. One friend I talk to now regularly calls the stock Harmony, he said he doesn’t even know why, it just sort of a word association he does with it now.
And to think all of this is going on right as we are sitting on the FANTASTIC NAME of MoviePass! ugggh! and the ticker is so damn obvious MVPS!
While I was at Microsoft I was involved in the naming of a couple big brands, including Bing and Live. I can’t even begin to tell you how expensive it was to obtain these names, secure the domains, trademark them, and build the brands around them. I am talking many many millions of dollars. MoviePass is a home run of a name. It is descriptive, easy to pronounce, short, easy to type, unique, and can be used as a verb very easily. “Should we MoviePass it tonight?” “Let’s MoviePass that one”. I shudder when I hear, “should we Sinemia it tonight” NO – I don’t want an STD! for god sakes!
We need to get the proxy resolved and get that name changed ASAP! When it does, shareholders of the obscurely named Helios & Matheson will surely benefit!