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:
- Belief that Mitch Lowe would be an honest backstop to Ted Farnsworth. I no longer believe that. Lowe now looks complicit in this debacle.
- 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.