Moviepass Has a LOT of Mojo in the Social Media Department

Either Moviepass really thinks they are going to stay alive- or the dude (or dudess) running social media has no clue of their death spiral.

Credit Lowe for keeping the troops motivated. Hopefully their paychecks cash, lord knows their stock options are under water.

In all seriousness, I like seeing a little fight left here, I can’t help but root for them, even if my stock left in the company would barely buy a yearly pass…

HMNY Paid Back The $6M Loan

Moviepass – the not dead yet company, somehow found a way to pay back the short term loan from bloodsuckers Hudson Bay. You have to think they sold a ton of stock and they received a bunch of subscriptions revenue at the end of the month to make it happen.

There’s a chance this company won’t die, and they seem to now be fighting like hell to survive. Early investors are extremely unlikely to ever see an ROI, but a big time risk taker could gamble here. I don’t recommend it, but if you have really big balls, some money that you were going to hit the casino with anyway, this could be a fun play.

It ain’t over until it’s over. I am now just enjoying the theater of all this. Who knew the most interesting show from Moviepass would be the company itself!

Moviepass Removing Support for Blockbuster Films was Predictable

Lowe has always said his main focus has been helping Independent filmmakers. Shunting the big studio big budget films makes sense, but is it sustainable? Maybe …it depends on how it is implemented and how well independent studios play along. If they offer some kind of revenue sharing to Moviepass it could make sense for a smaller more sustaining MP.

A move such as this would make the entire $9.99 experiment look very unfortunate- as if they wanted to start on the low end and slowly work their way up toward premium films and formats – it would have made way way way more sense to build her subscription base up that way in the first place. Now instead of looking like a force of nature coming up from below, Moviepass looks like a wounded duck looking for a good reason to exist.

That said, I would keep my MP subscription gladly if the selection of independent films was rich and I could also get the occasional blockbuster later in the film’s theatrical release.

Maybe they can hash out a way to survive. I am not talking about a stock worth buying here. But who knows, maybe they survive to fight another day?

Certainly Farnsworth lied about money being of no concern for MP. As it now appears money is THE ONLY concern at MP. Farnsworth has said multiple times that they had a backer who was willing to go “all the way” with MP as long as the kept growing. That has also apparently turned out to be a total fabrication.

Of course it’s now impossible to believe anything MP management has said in the past. Including their line that the service would BE at 5M subs. We may never know if 5M subs was the magic number now that the subscription seems to be getting totally reworked.

The demand for an “independent film” pass is surely going to be different than the old MP value proposition of any movie once a day. I also think heavy users may be more attracted to that type of offering. Real movie buffs, not casual moviegoers who MP needs.

Impossible to recommend HMNY stock here I do hope they survive to fight another day, but there’s just no plan that anyone can understand now.

Warning to Potential New HMNY Investors

After Ted Farnsworth-CEO of HMNY lied about his intentions with the 250:1 Reverse Split, and has promised massive more dilution from billions of new shares created. This stock is too risky to buy. I repeat- do not be fooled into thinking this stock is cheap because of the share price.

Ted Farnsworth cannot be trusted. He has lied to stockholders now on multiple occasions. Including lying about having a $300 Million Credit line, and lying about his plan to utilize the Reverse Split of 250:1. Leaving common shareholders largely wiped out.

This stock does not follow any of the normal rules or metrics of investing. You cannot evaluate this stock on Market Capitalization as you will never know how many shares may become available, and you absolutely cannot trust management to indicate what the plan may be.

Even at this incredibly low market valuation it is likely that you could lose all your money. Even if Moviepass itself survives and later thrives, you could lose all your money in this stock.

Buying this stock is not buying Moviepass!

It is possible that this stock was nothing more than a total scam, a shell company to raise money for Moviepass, with no intention to have ever delivered a return to investors.

Bankruptcy of HMNY is possible, while Moviepass itself could survive.

This is a proxy investment which makes the risk higher that management could spin out their Moviepass ownership out of HMNY, and thereby leave stockholders with nothing, even while Moviepass could survive.

if you have read my prior posts, I believe the 2 critical mistakes I made on my bullish stance were:

  1. Belief that Mitch Lowe would be an honest backstop to Ted Farnsworth. I no longer believe that. Lowe now looks complicit in this debacle.
  2. I underestimated the extreme risk of investing via proxy. I now fully understand why many money managers completely prohibit taking proxy investments.

If you decide to buy this as gambling money – know what you are comfortable losing. As you could lose it all.

I hope I am wrong about all of the above, I have held my small position in hope that I am wrong,

Because my blog receives a lot of visitors who are considering investing in HMNY – I felt it important to further highlight the risk of investing in the stock.

I will not be posting about HMNY or Moviepass again unless there is a major positive new development.

Finally- I know many will say I am short on HMNY, and or I have been all along. That is absolutely not the case. I have never shorted a stock, I have consistently stated that I NEVER short. I mention this because I know how fixated Bulls can be. (I was there once). Take precaution here. OK that’s it final warning.

Reverse Stock Split Announced – Ted Lied – Again…

Well, it appears that Ted Farnsworth lied to stockholders yet again.  One day after the special stockholders meeting where HMNY approved bagillion new shares and the approved  Reverse Split “up to” 250:1 — the company announced that it was going to move forward with the highest Reverse Split possible and do the 250:1.  I am honestly shocked by the announcement.  Ted is a special kind of CEO.

Just yesterday, Farnsworth told the audience at the special stockholders meeting that they did not have immediate plans to use the reverse split, and that is was “good insurance”.  That turned out to be yet another lie from Farnsworth.   I can no longer defend Farnsworth in any way.   I think he should be tossed out of the CEO position immediately.   I think he is both incompetent and massively dishonest.

I am going to hold on to my shares, but I cannot recommend buying shares immediately post this R/S.   The risk of short sellers driving this down another 50% here is very real here, it could happen in a matter of days.    I also don’t recommend panic selling the shares you have left.   Once the dust settles, the fundamentals can and at some point will come back into play.    The R/S does allow larger money managers to buy into this stock, where before as a penny stock it was totally off limits.  But unfortunately, not much of that will start to happen until the proxy fight is resolved because many MM’s have strict provisions against buying proxy stocks.     So if anybody is hoping or betting on big MM to come in and save the day here, I think that is unlikely to happen until the proxy is totally resolved.   Best guess for that is Mid August timeframe.

I have seen a lot of crazy stuff in stocks, this one for sure is the craziest stock I have ever seen.   There are a lot of early investors in this stock that will never see their money back.  Those that have averaged down to $1 or less have a chance of someday getting back to even, although that seems very remote now.

I don’t see sentiment for this stock improving without extremely positive new news.  The news would have to be a major partnership announcement with investment, or a believable major move toward Breakeven – (I no longer think you can trust management in their EOY claims – I am not saying it won’t happen, but I would not bet money on it).   Resolved Proxy and Ticker Change will help, but I don’t think it will be enough anymore.

Ted alluded in an industry talk today that they have another major disruption coming that will further turn Hollywood upside down.  I don’t believe him.  While it is possible that Mitch and Ted have cracked up a new idea, more often than not, when Ted hints at something big coming, it ends up being a lie, or being way less impactful than investors hoped.  Ted has repeatedly made false or misleading claims to the press and investors, and he just simply can’t be trusted at all when he makes hints.   Everything he says has to be discounted.  I honestly believe Ted is a combination of incompetent and dishonesty.   It is like playing poker with a rookie, sometimes they make brilliant bluffs because they are simply not wise enough to know any better.    This is how it is with Ted, he may be bluffing, or he may be too stupid to know better, unfortunately, it is impossible to know which.

I continue to believe there is real value locked up in this company, and I think that the right leader could come in unlock that value and put the company on a sensible path, the total market capitalization value of this company could go up solidly from where it is today.   But there is so much going against the company with Ted and his lies, that I can’t recommend buying it.   Nor do I think it wise to sell what you already hold.

*MM= Money Managers

**RS= Reverse Split

***Ted Farnsworth = CEO of HMNY and Crook