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