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The MOST EPIC SQUEEZE of our lifetimes
Read through their SEC filing. Anyone know their SEC legal stuff can confirm if HMNY can rebuy their shares for much lower, say bring back OS count to 500K or something, initiating the most epic short squeeze of our lifetime? Just curious.
See their SEC filing on the ATM offering:
https://photos.app.goo.gl/EhFm51xWeRCAvXf86
If I were them, assuming about 82+ million shares diluted now, I'd set aside a few million dollars (Ted, don't freaking waste it man, you hear?), wait for the stock price to tank like this, and buy back like 80+ million shares, or at 4.5 cents, about $3.6 million worth. This puts the outstanding share right back at 2 million. This would be epic to see it go from 5 cents all the way back into double digit dollars. $10/5 cents = 200x. So $5K x 200 = $1 million LMAO. These clowns should just hire me. I'd do a much better job than they are.
This is why misguided longs keep getting slaughtered.
Looking at all the moving parts, it's my opinion that the MP app is limited in showings not because they're out of money, but because they're choosing to "reduce deficit by 60%" by simply shutting off MoviePass app when their daily budget is out, showing only 1-2 viewing times, and showing only certain movies to force heavy users (who make up 15% of their user base, or about almost 500K) into cancelling. Infrequent users, some don't even know about what's going on. Other infrequent users simply don't care since they only go 1-3 times a month and to them $9.95 is still a great bargain for seeing a few movies a month. It's the 4+ per month users that MP is trying to get rid of. Mitch eluded to this strategy in his interviews. My calculations proved spot on with Mitch's ratios that the 15% who goes 4+ times in a month are the ones using up the 40% expenses for the month. The numbers do not work out any other way. The only way they can mess this up is: You named it... Ted Farnsworth. He is the FAILURE FACTOR in all of this.
From Mitch's MP sub claim of over 3+ million, which I already proved mathematically what range it would be in (as of the date Mitch was interviewing) from his word choices, means they continue to rake in money, while limiting shows, again forcing heavy users into cancelling. THAT is their plan. They should NOT be running out of cash because they're but simultaneously: REDUCING usage AND GAINING revenue from 3 million+ subs.
HOWEVER, paid pumper Stock Facts / Watching shows up whenever the stock tanks, suggesting they are doing ATM dilutions whenever he shows his face around here. So the question becomes, if they are diluting, WHY? It's very possible Ted Farnsworth is wasting all the money as usual. It's also possible chargebacks AND legal fees are hitting them hard and they're having to make up for it. It's hard to say without seeing the 10-Q and additional SEC filings. Again, the most critical thing right now is the outstanding shares. Seeing a small number below 10 million would be ideal, but unlikely due to paid pumper Stock Fact / Watching's pump schedules. Seeing a high number like 100 million + without seeing any significant cash in the bank confirms they are still losing a lot of money (not to MP sub usage because they're already restricting users), but possibly from Ted's side jobs, legal fees, or chargebacks. If just 50K Costco members cancel their $89.99 annual packages and get a full refund, that's easily $4.45 million dollars that could be hitting them.
Yes, operating expense was not included. That's not the intent for my calculations. My calculations were simply showing the cash deficit/gross loss BEFORE operating expense. Like I said, and you know this too, that if they actually utilize a line of credit instead of hammering shareholders, the stock price would go up. Ted can't/won't get a real line of credit, hence Ted is the failure factor in all of this.
Assuming it's correct (not holding my breath as they've promised many things and failed to deliver), $4 extra is like increasing the MP sub fee from $9.95 to $14 (which puts them at about 1 million net positive deficit. There's still operating loss after that, so they will need to get that $6. At +$6 ($16 MP sub fee), they are net positive $6 million per month, BEFORE operating loss.
I'm not sure where they'd get that much from, but if I were them, I'd partner with Amazon for a cut in the revenue of items from MP subs who purchase Prime.
I can think of a few other things. Only if they hired me :p
I knew that before you did :)
This guy purchased 5% stake, sure. However, he's been diluted since. He's no longer required to report anything. End of the story. The dilution must stop. Period.
Mathematical Models Confirming Mitch Lowe's Statements.
Here I use my model to calculate the month of May, because Mitch, in the interview with Cheddar used the month of May in his figures, saying the "total user" ratio was 1.7, but the casuals are closer to 1. He also noted something along the lines of "going to the movies 4+ are heavy users". Additionally, he mentioned heavy users make up 40% of the expense. My numbers confirm what he's saying. The Gross Loss matches up with the "Monthly Deficit" from SEC filings of $40 for May.
https://photos.app.goo.gl/mGkTLNDQRbbgovGj8
Next, I use my model to calculate July (BEFORE the reverse split & all the changes). The Gross Loss/Monthly Deficit comes out to be about what the SEC filings say at $45 million.
https://photos.app.goo.gl/CSKf6L58NNgmF6si6
Then, I apply the -60% reduction in "cash burn", which I believe they just mean the Gross Loss, as per the 8-K dated 7-31-18, which Mitch was quoting as well in his interviews. This reduction is basically the MoviePass app changes where it shows limited movies and times. Their goal is to simply force heavy users to cancel their subscriptions, and they believe casual users won't be affected as much and therefor won't be as likely to cancel.
https://photos.app.goo.gl/NHSG95nLeQ1jqWey9
Finally, I apply the -60% reduction in "cash burn" AND removed all heavy users (i.e. scenario as if they all quit) AND increased the monthly fee from $8 (discounted annual packages) to $9.95. This is a best case scenario of course.
Note this does not take into consider other revenue. Q1 showed a $1.5 million or so revenue from marketing/ads or whatever. Assuming they can put money where their mouth is and Ted Farnsworth stops wasting money, the cash burn is reduced drastically.
https://photos.app.goo.gl/FF7XqCnr6tUgkiT39
Then, I check my work. Math and physics is only as good as the accuracy of the equations used. I plug in Q1 numbers. Guess what? They match and are only off a little.
https://photos.app.goo.gl/uvFmQMEDETcREkNP7
To end it, we try to determine how Ted the Milkman Farnsworth came up with the $1.2 billion he needs. Mitch said the reduction of the -60% will also reduce this by around the same. I believe he means HMNY basically looked at the monthly loss and projected out into the future of a continued growing loss amount, thinking he could just keep milking shareholders. The math goes something like this, through to next year. Of course, this does not include any cash burn from Emmett/Oasis or other money-losing movie schemes. I still don't agree with them HERDING MP subs to watch movies. If anything, they should just make movies and just HOPE MP subs don't go. lame.
Bottom line is if Ted stops messing around, they actually get ad revenue in, or as I suggested to them, put an option (not mandatory, but an option) to put ads on the app to help them, and are able to make deals, and they stop doing deep ridiculous discounts, this may be doable. They'd still need to get an actual LINE OF CREDIT (i.e. loan), and stop diluting shareholders to hell. Ted is the failure factor in all of this. If anything, he'll munson it.
https://photos.app.goo.gl/cGC4GPskkLFnVQ4x9
MP sub count, as per Mitch Low's interview. Mathematically, it can only be in a specific range (as of the date of the interview). It's possible the value has dropped by 50-100K by now as heavy users cancel from MP's strategy of simply turning off the app whenever they hit their daily budget limit. Per the calculations of paid pumper Stock Facts/Watching showing up to pump so Canaccord can dump, they should have enough cash, but I think chargebacks and legal matters are taking up some expenses. OS calculated at about 86+ or so million as of this past Friday (if taking into account Stock Fact's pump schedule).
https://photos.app.goo.gl/RoXVhxrMYE7koydS8
Nah. No current positions. I'd like to see MoviePass succeed but Ted is still the problem. He'll find a way to waste the money.
Potential MASSIVE short squeeze setup: In a CASH account, quietly buy every share (close to 80m now? - which is only a few million dollars total) so that you're buying it for as low as possible. Then, demand return of shorted shares. Watch the EPIC squeeze. Unlike a MARGIN account where you have to give them permission when you sign up for the MARGIN account, brokers can't lend your shares in a CASH account to be shorted without your permission. This is basically what happened with Volkswagen. For a time, their stock was the most valuable in the world during their epic short squeeze. LOL
If enough longs switch their MARGIN accounts to CASH accounts, or simply buy with a CASH account and demand the return of shorted shares, an epic short squeeze will ensue.
Hmm actually I think the "unknown costs" might be legal expenses and chargebacks. That could explain the continued ATM dilution even when they shouldn't need to. Man, they are in a heap of trouble.
Indeed, the hardest thing about being in the market isn't really just about finding the right stock. You can be Warren Buffett and calculated using his magic winning techniques that a company will do well for the next 10 years, and you could be buying when everyone's selling, and the stock wouldn't rise for 2-3 years because the other people haven't figured it out.
Or, you could have calculated HMNY would be out of money by July 15th (and they begged money on July 13th from Hudson Bay), and predicted all these nasty events months out, and warned people and people would just simply call you names, accuse you of this and that. So yeah, predicting a stock price is one of the hardest things to do. Not only do you need to know what the hell you're talking about, you have to be able to predict human behavior.
At any rate, if they can stop the bleeding *AND* stop the ATM dilution (i.e. get a freaking real credit loan instead), the stock will rise. Until then, it'll continue to move further down UNTIL shareholders stop speculating and they know as I know from the numbers it might be OK if all of these come to pass. Sentiment is more important than news sometimes. And even now, people are still talking about a reverse split, fearful about it and not having a clue that HMNY is doing their best to stop the selling because they're afraid of a hostile takeover and need that reverse split to protect themselves. So many moving parts and management has to play this right or it's history for them.
With Mitch's "testimony" on MP sub counts, I redid my Sub Loss. This increases the revenue slightly the past few weeks of projection. Plus, based on the paid pumper and stock tankage and volume, my calculations work OS out to be 86.7 million as of Friday. The only thing that missing is how much money are they wasting on Emmett/Oasis and the Bruce Willis movie. The number of shares OS (especially if it's 200+) means they should have tens of millions in the bank. Yet they're still acting like they're strapped for cash and still diluting more. That makes no sense. There's some cost they're not telling us.
In this link, I used what Mitch said to deduce what the MoviePass sub count COULD have been around the time he did the interview. I think the sub count is down at least 50-100K since just from heavy users quitting. That's their strategy.
https://photos.app.goo.gl/9katsAATew6q3FgW7
Ted doesn't care about shareholders, only that he can continue milking them. I would be surprised to see any shareholder letter. The only hope lies in his own fear of a hostile takeover and Mitch's hope of salvaging MoviePass.
Agreed. We need to see the outstanding shares. Right now that's the only thing that matters. If it's over 80 million, we see continued bleeding. If it's under 10 million, the stock rockets. I expect to see around 100 million by now, only because each time a Yahoo Finance handle called "Stock Facts" or "Watching" shows up to pump, the stock tanks. He appears to be working for Canaccord. Using his pump dates, we can probably deduce when Canaccord is dumping. This pumper created fake accounts in multiple areas and started pumping in early May, right around when Canaccord first started dumping on May 9th. He didn't pump when Mitch was on those interviews (maybe he's Mitch? j/k). After Match was done, he started pumping again as if to wait to see what the stock would do and then start pumping immediately after so they could sell. He was around all yesterday when level II was showing a seller at 6 cents, which I already deduced it's HMNY instructing Canaccord not to sell below 5 cents. He was around again yesterday, which I believe due to the stock tankage, HMNY probably instructed them to drop the limit to 5 cents.
Knowing the real OS will give us 100% the cash burn rate between August 1 and now, which is the time frame they started the "outages", and we have a basis of the July 31st 6.7 million OS (and hopefully cash in the bank numbers) to work as a starting point.
Buffett also said to read a lot. Have you read the SEC filings?
Buffett says to buy UNDERVALUED GREAT stocks at a good price, not average or bad stocks at a GREAT price. Want to guess which one HMNY is currently?
Buffett never intended for people to baghold and lose money like this. You quote Buffett but Buffett would be ashamed and give you a lecture if he knew.
Obviously all the misguided souls believing in that mumble jumble who did ZERO or limited due diligence did very well. Wake up and smell the coffee man.
I don't remember either. I'm not sure if Nasdaq has a penny stock minimum. It's always been $1, and you get the 180 day notice. At the same time, this is a world record for Nasdaq stocks (as far as I can tell) where a stock tanked this flipn' fast. It may be the first to trade sub pennies on the Nasdaq. We live in a reactionary society, not a proactive one, so it's possible the Nasdaq will put a rule in place after this. Who knows?
There is no way it's north of 250M. My math in the link below.
Where is your math? Show me the math.
Show me how you came to the conclusion they need $1.4 million per day. Show me the math.
If you can't show me how you derived these numbers, you're just making up numbers.
https://finance.yahoo.com/quote/HMNY/community?p=HMNY&messageId=a6279782-54ff-4247-babe-c2d00d85409a&bcmt=1
Do you even know why they would do a RS?
Explain to me.
I don't think the OS is at 250 million. Judging from the price action, volume, pump/dump PRs, prior selling at around only 10% of the volume (which means we can't use volume alone to confirm what real dilution is), how the MP app is behaving etc., my own calculations, I still think we're in the 70-100 million OS range. My post here explains why it cannot be 280 million+, mathematically. It might be 150 million, maybe, but not over 200 million.
https://finance.yahoo.com/quote/HMNY/community?p=HMNY&messageId=a6279782-54ff-4247-babe-c2d00d85409a&bcmt=1
I think using $68 million as a burn rate for all quarters is flawed. They made changes in early May to curb repeat movie watching (Avengers, Black Panther etc.), sharing of accounts on multiple devices etc., which supposedly lowered the burn rate by about 35%. How much it actually affected it long term? Unsure.
All their various 8-Ks released between May-July talking about cash burn, when I add up the numbers, don't really add up and are off a few million here and there. So either they made some math errors, or they're making up "close enough" numbers.
For example, the 8K dated 5-8-18 says $21.7 million was the cash deficit for the 7 months from Oct through April. I used FY 2017 numbers and Q1-Q3, 2017 numbers to derive Q4, 2017 numbers, which Q4 2017 worked out to be a cash deficit of $10.8 million and Q1 2018 (per the 10-Q said Gross Loss was $86.5 million). I then used this to determine April would have been $54.6 million cash deficit (151.9 - 10.8 - 86.5).
The 8-K dated 6-21-18 (which you'd think is more accurate since it's a later one) said they believe the cash deficit per month was $25 million for the 8 months of Oct through May. Doing the math, $200 million ($25x8) - $151.9 million ($21.7 x 7) = $48.1 million cash deficit for May, an 11.9% reduction, far from the 35% savings they claimed for May.
Yet their 8-K on 6-21 says May's cash deficit was $40 million only. AND they also said June was believed to be $45 million, and July at least $45 million. How could June & July be less than the calculated May using THEIR numbers they provided us???
If I work the math backwards and BELIEVE in the $40 million for May, and I do:
$200 ($25 x 8 months) - 86.5 - 10.8 - 40 (May) = April becomes $62.7 million cash deficit. If we take 40/62.7 = that's a 36% reduction in the cash deficit, which sort of matches their 35% reduction claim.
As you can see, there's a discrepancy if you do the math one way or another. Their figures just doesn't match.
1. They just continue to dilute like crazy down to sub penny land.
Possible. They don't want to do this because it puts them at a risk of a hostile takeover.
2. Get a merger or buyout offer that covers the finances needed.
Possible, but Ted Farnsworth won't want to lose face. He'd rather burn down what he built than sell it to have AMC laugh at him.
3. Come out with a fluff PR blitz to dilute shareholders on the run.
This is what they've been doing to attempt selling at higher prices, for less shares, to limit the dilution effect. It will only delay the inevitable.
4. Do another RS.
They need shareholder auth. They claim they can, from one authorized in 2016. They will only do a RS if it's TRULY going to help prevent delisting (which will ONLY be done when they are net even and won't dilute anymore - otherwise, MASSIVE tankage). They will also keep this to prevent a hostile takeover. I'm not worried about a RS. I'm more worried about continued dilution.
5. File for Bankruptcy protection. It appears Ted is willing to go down with the ship rather than sell, therefore Chp 11 would provide enough protection and time to come out of the gates in a few months like a new shiny penny ( no pun intended). Chp 11 would also provide DIP, and force providers not to shut of the services that seem to be on the edge at the moment.
Yes, this also very possible.
You forgot: 6. Delist to OTC and survive on a limited financial means
OK, I did the numbers for May. Because new box office hits are released each month, and due to MoviePass' continuing changing of terms (i.e. allowing people to see the same movie twice, not allowing them etc.), I think the exact same ratios can't be used for every single month.
Since Mitch quoted only May, I did the numbers for May. The Calculated Monthly Deficit (Gross Loss) comes close to about $40 million as HMNY's SEC filing said.
To calculate the Cost of Revenue, there appears to be two ways. It may be more accurate to base it on the Total Monthly Ticket Expenses, but as per the FY 2017 and Q1 numbers, it could also be based off the revenue. I suspect that's because little changed between FY 2017 and Q1. However, starting in Q2 with the curbing of expenses, I think it changed in May.
To calculate Cost of Revenue, I did roughly 1.28-1.30 x the Total Monthly Ticket Expenses
Alternatively, you can also multiply the Monthly Sub Revenue by around 2.78 or so.
Obviously the numbers won't match up exactly, but should come close to each other.
https://photos.app.goo.gl/iSiiDaTi54H6MBBj6
The only "good news" will be if they stop cash burn or limit it greatly and stop ATM dilution and thereby mass slaughter of shareholders
"It Will close Green today and run monday, mark those words and my buy recommendation below 6c Will look very good! Some People act like they know everything!"
1. Closed red. Very red.
2. Words marked.
3. Buy recommendation? Ouch!
4. Some people sure do act like they know everything when they're dead wrong pretty much all the time!
Right. The problem is, has, and always were: dilution. That's what caused the tankage for the past 9+ months.
The solution? Stop the dilution.
How? Stop the money lost. Losing money in itself isn't always viewed as negative for a company that's in a growth stage. What is negative is HMNY isn't using an actual debt /credit line (i.e. $500 million) to fund operations. He's using shareholders, thus diluting shareholders. So yes, this thing can NEVER go back up with continued ATM dilution. It can't. No way. No how.
However, if they can get rid of the 15% that abuses the service or those that uses heavily, and leave the 85% that are closer to break even, and THEN gain revenue from ad sales, along with using an actual debt / credit line so they don't have to keep diluting shareholders to death, then I'll see it run.
I know MoviePass' strategy right now is to limit usage to:
1. Lower the expense.
*AND*
2. Force heavy users to quit. Casual users rarely go to the movies so they don't even care. It's the heavy users who are whining and complaining online and canceling. This is exactly what MoviePass' strategy is. I know it after observing how the app behaves and what Mitch was saying in the interviews. They finally learned their lessons.
If ATM dilution continues, HMNY is NOT undervalued. It's valued at future market outlook, which is: shareholders will die from continued ATM dilution.
If ATM dilution stops, again, because of future market outlook, HMNY is VERY undervalued.
So, when the 10-Q comes out, or when any of the next SEC filings come out that gives us any details on the share count, that total outstanding share number is going to be absolutely critical. It is the ONLY thing that matters now because it reflects cash deficit directly.
I believe outstanding shares might be in the 70-100 million range by now. However, if they surprise us by saying it's only about 10 million, this puppy will probably rip and skyrocket. 70-100 million obviously means they're still burning cash. 10 million means they're burning MUCH less.
Here is some, somewhat good news, sort of. I mean when it involves Hudson Bay, it's always bad news technically. But, this might be good. Maybe. Not really. It's possible in preparation for another reverse split in the future (not anytime soon) or some sort of voting, they may sell Hudson Bay another maybe say 50,000 Series A Preferred Shares, which goes for a flat $1,000 each. The proceeds will be for $50 million if they do, thus lessening the need for ATM selling. The last time they sold Hudson Bay 20,500 Preferred Shares in June, it REQUIRED, as a condition of the closing, that Hudson Bay (and all HMNY insiders) vote in favor of the 5 billion (2 billion then) auth shares and the reverse split, as well as a number of other things. In other words, HMNY gave Hudson Bay a favorable deal, in return. Qiud pro qou. Sure, it can get worse when you make a deal with the Devil. But at least there'll be less dilution for common shareholders.
https://photos.app.goo.gl/XZmBvLxTGJ1A8P1r5
You guys remember when I broke down the price action on the charts showing that HMNY/Hudson Bay bought up shares to be record holders as of date to be voters, but then got stuck bagholding, so they had to pump some more for them to get out? And THEN, HMNY released a SEC filing conveniently moving the record holder as of date for voters by a few days to ensure the "bagholding" voters were going to vote in favor of them? Fact is stranger than fiction.
Shareholders had ZERO chance to fight off HMNY/Hudson Bay collusion. They were systematically wiped out. Just sad.
But that's the problem. Management doesn't even trust their own selves. Plus they know they need that reverse split to protect against a hostile takeover, which I've already explained. You'll hear Ted lying everywhere, but you will never see it noted in a SEC filing. He says one thing and puts opposite things on SEC filings.
Right now, there's no danger out a reverse split. They must time it right.
The real danger: Massive and continued dilution.
Just to be clear, if and when MoviePass curbs their expenses and stops offering ridiculous $6.95 annual packages to people, and only when all these promos end, and everyone is converted to the 3 movie a month package AND be able to gain revenue from other avenues as they promised for almost a year now, AND Ted Farnsworth stops wasting shareholders' money, will they need to stop the ATM dilution. If all this can happen, then I think HMNY/MoviePass may just dig themselves out of their grave. Until then, they're still digging the grave for their own funerals, but just at a slower pace. The 3 movie limit is a step in the right direction. Is it enough to prevent the paid pumpers from showing up while Canaccord dumps? We won't know until we get more SEC filings confirming the outstanding share counts.
It's possible Hudson Bay is shorting. But the reason the stock has tanked so much is management lost the trust of everyone and they continue to ATM dilute in order to fund operations when the stock is this low. Ted Farnsworth is your enemy, not the shorts.
It could run Monday, but only if Canaccord sells enough today for MoviePass to function over the weekend.
If you haven't noticed, a new 52-week low was made. That usually doesn't bode well. Never invest with your emotions.
I suspect the selling is from HMNY needing money for the weekend.
Here's how investing with Ted Farnsworth is like:
Actually I sold yesterday morning. See my prior posts.
YOU WANT TO MAKE MONEY?
Ted Farnsworth says you'll be making money, even while you're sleeping. If I get a dime for each time I hear the phrase "You'll be making money", I'd be able to finally afford to buy HMNY stock.
OK did some more thinking after re-watching this video. Even though Mitch Lowe said it's "cost of goods" they reduced (and SEC filings say it's "monthly deficits"), the ONLY number that matches up with the $40 million monthly deficit in May, $45 million in June and so on mentioned in SEC filings is the Gross Loss figure. If I adjust MP subs to account for various points in time, using the ~1.7 ratio, the Gross Loss matches up with the SEC filings. I think Mitch was just dumbing down the definition.
It's also interesting that it's August, yet Mitch chooses to quote May's ratio of 1.7. Why May??? I believe it's because the ratio was completely different and much larger in April before they stopped MP subs from re-watching the same movie and sharing accounts.
LOL a reverse split is not coming unless there's a reason for it.
I went over their 10-K and some of the 424B5 forms (supplemental prospectus where they gave figures), and they gave specific numbers such as 6.1% and 6% for the buying power of MoviePass subs vs total ticket sales. This was for the April, 2018 time frame. However, they did not detail how exactly they calculated this number for box office %. Also, I use the-numbers.com, and I think they use some variation of some number from the Motion Picture Association of America (mpaa). So I don't expect this to match. Plus, I somehow don't trust their number. This is the only figure that doesn't really match up with the other numbers like when I change the MP moviegoers ratio to 1.7 ratio and so on.
As for the 60% reduction, where it gets applied to makes a WORLD of difference. Let's take their Financial Statement for example (the Subscription and Marketing and Promotional Services section, on page 29 of their most recent 10-Q for Q1):
All numbers in millions...
Subscription: $48.6
Cost of revenue: $135.3
============================
Gross Loss: ($86.7)
Total Operating Expenses: $11.7
============================
Loss from Operations: ($93.3)
Subscription: $48.6
Cost of revenue: $54.1 (we apply -60%)
============================
Gross Loss: ($5.5)
Total Operating Expenses: $11.7
============================
Loss from Operations: ($17.2)
Subscription: $48.6
Cost of revenue: $135.3
============================
Gross Loss: ($34.7) (we apply -60%)
Total Operating Expenses: $11.7
============================
Loss from Operations: ($46.4)
So, even though Mitch Lowe said said the 60% reduction is the "Cost of Goods" while the SEC filings say it's the "monthly deficit" (which if you look up online, there's no real financial standard definition for this word. In other words, they made up these words and as such), we still have no freaking clue what they really mean, or what kind of creative Enron-style accounting they're using.
Technically the "Cost of Goods Sold" is part of the "Cost of Revenue", so if we literally take that into consideration, from a standard financial perspective, reducing "Cost of Goods Sold" by 60% will only reduce "Cost of Revenue" by a fraction of that, such as 35% because Cost of Revenue also includes other things NOT part of "Cost of Goods Sold" that would therefore NOT be reduced.
I know from reading the 8-K dated July 31, 2018, they made changes to prevent people from seeing movies, which reduces ticket costs, which in return reduces "Cost of Goods Sold". But that means the ratio that Mitch quote of 1.7 would NO LONGER apply. In fact, Mitch quoted the 1.7 and mentioned it was in the month of "May" so I strongly believe that ratio is no longer relevant starting in August because of the changes they did recently to prevent people from seeing movies. That 1.7 is only useful for calculating Q1 and the 2017 FY numbers.
But.. once the Q2 numbers come out, we'll get a clearer picture of the "monthly deficit" or "cost of goods" as Mitch put it. I can then go back and redo my calculations based on what matches and deduce in deed if "Cost of Goods" is really the "Gross Loss" or the "Cost of Revenue" or just a part of the "Cost of Revenue". That's why I can't wait to see what kind of mess it will be LOL
There were more ATM dilution today I believe. I think they dumped a lot on Monday during the pump, stopped for a few days and then started the day after Mitch Lowe interviewed (which is today).
I believe the instructed Canaccord not to dump under 6 cents, which is why we saw it didn't really go below 6 cents. Also, there is a paid pumper that shows up whenever Canaccord ATM dilutes, which I previously noted. That poster was pumping non-stop today during the ATM selling, straight into after hours. Normally shorts cover in after hours and the stock price goes up then. It never happened today. I suspect it's because HMNY needs cash for the weekend and in case shareholders sell off after the nasty LOSS REPORT.
So accordingly, due to the MASSIVE dilution, the risk/reward cannot be simply attributed to a single price. Price is irrelevant, just like when people kept asking "should I buy at X?"
No. You buy when the outlook is good. The price can be 0.000001 or 0.001, or 0.0001. Don't get caught up in the price.
Yes and No.
Yes only because of limiting movies to 3 a month. However, this will take months and months to complete due to the annual packages they sold at FREAKING ridiculously low prices.
No because they may not make it until then in order to apply this 3 movie a month limit.
Also no because they've destroyed their shareholders repeatedly that no one really trusts them. Big investors don't trust them, which is what led to them having to deal with Hudson Bay. I warned back in April when the last real investor (Canaccord, if you want to call them that I guess) was willing to only do $30 million. Before that, it was $100+ million.
So, my outlook is near term, they will suffer, and so will shareholders.
Long term, if they stop screwing around, then maybe.
I still believe Ted Farnsworth needs to go. He won't though, so my outlook is pretty dim.
This is my calculations on Earnings (Loss)
Q: "Also any thoughts on their earnings that is to report tomorrow?"
A: See below.
Q: "Any up side?"
A: There is no "up side". It's going to be a nasty report because they lost (and I calculate) a ton of money in April, with figures as high as -$60+ million loss in that month alone. They didn't do the 35% curb in expenses until early May after Avengers came out.
Q: "Can they do another reversal at any time in near future such as weeks or months end?"
A: There are some FINRA rules, but technically there's no limit on the number of times they can do reverse splits. However, they must have a GOOD reason to do it in that they typically must get shareholder approval first. The claim they believe they have the right to effect a reverse split authorized to them from shareholders back in 2016, but legally, I don't know if they can.
They have until December to be delisted, so they would only effect a reverse split (if they don't get shareholder approval) if they absolutely believe 100% their stock can stay above $1. Also, they will want to save the reverse split in case their stock price tanks so much that they have to dilute billions of shares and be in danger of a hostile takeover. If someone purchases 4 billion of their shares to be the majority shareholder, they may attempt to do a hostile takeover by demanding Special Shareholder Meetings, voting out board of directors etc. HMNY will want that reverse split available in order to effect a reverse split, and then diluting shares like crazy to prevent the majority shareholder from being a majority shareholder, thus negating their hostile takeover. Obviously if they do not have a reverse split option available because they wrecklessly used it, calling a Special Meeting in order to vote for a reverse split authorization won't help when a hostile takeover is already in progress and the majority shareholder votes no to the reverse split!
This is like going to war with a neighboring country and then asking them for ammunition to shoot them with because you're out of ammo.
Q: "That tells me to think down or if no reversal in near term up?"
A: I know everyone's preoccupied with and scared about another reverse split. The real thing you should be scared about is the dilution. MoviePass supposedly has reduced their expenses by another 60% (by preventing people from going to the movies). This is not a viable long term solution. Eventually, they will lose more and more subs. If they need money, obviously they will dilute, causing the stock price to tank.
HMNY/MoviePass is in a horrible predicament right now. They need to dig themselves out of their grave, or die off and be history.
Subscription: $66 million
Marketing and promotional services: $2.5 million
=============================
Total Revenues: $68.5 million
-Cost of revenue: $186 million
============================
Gross (Loss) Profit: ($117.5) million
-Total Operating Expenses (Selling, general & administrative, R&D etc.): $55 million
============================
Loss from Operations: ($172.5) million
-Other Expenses (interest expenses, fancy Enron-style accounting):
============================
Net Loss: (Doesn't matter. What matters is the operating loss)
You guys remember the Verizon pump? Longs pumping that Verizon was a partner and bought like a bunch of lemmings, only to get slaughtered? You remember how they got diluted to nothing like the rest of the baggies so they were below the 5% threshold, and therefore were no longer required by SEC rules to report their transactions or positions anymore?
Let's do some basic math together. Morgan Stanley Capital Services LLC's 158,493 shares (out of 1,685,000 shares) as of July 25th (the day of the infamous reverse split bloodbath) was 9.4%. However, July 31, HMNY reported there were 6.7 million shares. If Morgan Stanley Capital Services were smart, when they saw that news, they would have dumped their shares immediately. And because at that point they were under the 5% level (2%), they were no longer required to report in any SEC filing that they were a bagholder anymore. So as far as we know, they're no longer bagholders. The original $3.325 million worth of shares turned into a few thousand. LOL
Oh, and MoviePass App was down in limited fashion today. I had to search for Mission Impossible to even find it. It was hidden. Older movies are blocked, but newer movies available. They are low on cash again, hence Warning (Stock Facts, Canaccord's Paid Pumper account) pumped all day on the Yahoo Finance boards while Canaccord dumped above 6 cents as instructed to do so from HMNY.
https://finance.yahoo.com/quote/HMNY/community?p=HMNY&messageId=26a10792-87b5-46e9-9c61-7069b039d62a&bcmt=1
See for yourself
This video link from Bloomberg is great man. Thanks! Mitch gave a little more info in this interview when he said 1.7 at ~$10 was the usage of all the users in May. That gives me something to work on to tweak my numbers. Due to the nature of the calculations/equations involved, the exact numbers and ratios I change here and there affects other numbers in significant way, meaning there's not a lot of right answers. There's only a few right answers, depending on all the variables and what the results should be.
Will mess around with the numbers tonight and repost.
No got out this morning when I thought about how much of a blood bath the earnings would be.
Yeah we'll need some time for all this to take effect for sure and all the expiration dates out there. In the mean time, I suspect the stock will go sideways or continue tanking until there's more clarification on how much dilution they're doing daily and $$$ in the bank (or lack thereof).
I don't know if you have the app, but on mine, when I log in, it pops up a message each time if I want to accept or not. I just hit the X to get out. So he's saying 15% on the first day agreed to the 3 movie limit change already because they only do 3 or less movies.
MoviePass/HMNY are on the right track though. Before, they were focusing on the "crunching data mumble jumble... please go see every freaking movie in the world so we can milk shareholders to death" idea. At least Mitch now said he's looking for those who only use it a few times a year and doesn't are if the heavy users leave.
Thanks for the clarification on the 60%. "Cost of goods" is affected the same as "Cost of Revenue", for the most part. Technically Cost of Goods Sold is included in Cost of Revenue. Cost of Revenue encompasses more. The ticket cost purchased each month is also included in Cost of Revenue. So when he said he reduced it by 60%, I believe I understand it right, that he was referring to the SEC 8-K filing in my screenshot on the right side where that 8-K basically says they are limiting people from seeing certain movies etc., and therefore reduced ticket costs, and therefore reduced "Cost of Goods / monthly deficit", hence "Cost of Revenue". So I think I understood it correctly, I think.
So it sounds like their term they made up "Monthly cash deficit" is "cost of goods", which is most likely "Cost of Revenue" or at least a portion of it. When the 10-Q comes out, if it matches my expected numbers I posted before, then I'd have known I got it right, assuming they were truthful in their prior SEC reports about the $40 million + cash deficit per month.
But... in one of the articles I posted earlier today, it talked about them not having financial controls or whatever AND typos in their SEC reports. That means they could have "messed up" (intentionally or unintentionally?) reporting a number and all my calculations would be off. DAMN YOU TED!
There's ZERO way they can break even unless:
1. They reduce ticket usage to EXACTLY 1 ratio and they have no other costs on top of the ticket costs (which is NOT true). There'a always additional costs for "Cost of Goods" or "Cost of Revenue". So this is not a valid scenario.
2. They reduce ticket use UNDER a 1 ratio (i.e. people go to the movies 0.75 times a month or something on average). THEN, I can see them breaking even even with Cost of Revenue.
3. They somehow herd MoviePass subs to watch movies where it's least expensive and completely remove expensive theaters from even showing up.
4. They have other sources of revenue AS THEY PROMISED. DAMN YOU TED AND MITCH! Q1, they had over $1.4 million or so in ad revenue, so if this increases, then yeah. But no, I don't see it increasing just yet. I gave them some advice... let's see if they follow it.
So... that's why when they kept claiming they'd be magically profitable at 5 million subs. What a load of brown stuff. They MUST find people who rarely go to the movies and just keep paying, or they MUST find other sources of revenue as they promised. Period. Anything more and they're milking shareholders.
I'm expecting a blood bath when the LOSS report (we don't call them Earnings reports) is released. Be ready guys. Could be tonight, or tomorrow, possibly even next week. That is, unless they file a delay lol, which is even worse.
Delayed financials mean SELL THE FRICK OUT.