Helios and Matheson Analytics Inc Is Still Home on the Bullish Range

S3 Partners explores why bearish sentiment is not responsible for the sharp pullback in HMNY stock today.


Helios and Matheson Analytics Inc (NASDAQ:HMNY) shares are falling off almost 30% today, but S3 Partners analyst Ihor Dusaniwsky does not credit short sentiment here. No, argues the analyst, the crazy volatility circling the IT tech player belongs to the long bulls.

It makes sense for bulls to be gravitating to a tech player who just hooked the biggest, meatiest stake (52% to be exact) in MoviePass, a platform in a movie theater market world that allows subscribers to buy a cheap monthly pass for monthly movie screenings. In fact, after-hours, news broke that the HMNY team is so confident in MoviePass’ potential that the company is upping its ownership to almost 54% of the movie subscription platform pie with a hefty $1.5 million investment. This too could have prompted the sell-off, but for Dusaniwsky, the distinction is crucial: the rise and fall of HMNY has everything to do with the bulls here.

While analysts and “media pundits alike” jumped to pointing to the recent massive climb in value to a “short squeeze,” with CNBC’s Jim Cramer tweeting that “a squeeze is a squeeze by any name,” the analyst comments, “This domino effect of buying pressure also coaxes momentum buyers into the trade which turbocharges upward price movement and trading volume.” In fact, “With so much buying pressure on every tradable share a sudden upside rally was inevitable,” explains Dusaniwsky.

Calling for recall movement to rise in the short-term as long investors sell positions to “lock in their unrealized profits before HMNY’s stock price retreats,” the analyst likewise sees borrow rates settling this week. With this in mind, the analyst predicts, “If recalls continue and HMNY’s stock price increases or plateaus around the $25-$30 level, creating even more short pressure, stock borrow rates will move even higher.”

Ultimately, “Much like HMNY’s recent stock rally was not due to a short squeeze, today’s 16% stock price decrease is not due to increased short sale activity – there is very little stock available to borrow today so there is very little new short activity today, virtually all lendable stock is already on loan. Long stock buyers drove HMNY’s stock price up and long stock sellers are now driving HMNY’s stock price down,” Dusaniwsky who insists: “Please, don’t blame the shorts.”

Additionally, according to TipRanks, in the last 3 months, Brian Kinstlinger of Maxim rates a Buy rating on Helios and Matheson stock with a price target of $20.Chart