If you’ve been waiting patiently on the sidelines for a pullback in Helios and Matheson Analytics Inc (NASDAQ:HMNY), it’s here. HMNY shares are collapsing nearly 35% this morning, following the announcement of a dilutive equity offering.
Helios and Matheson announced that it has agreed to sell 8,261,539 Series A units, with each Series A Unit consisting of (i) one share of the Company’s common stock, par value $0.01 per share, and (ii) one Series A Warrant to purchase one share of Common Stock. The company has also agreed to sell 969,230 Series B units, with each Series B Unit consisting of (i) one pre-funded Series B Warrant to purchase one share of Common Stock and (ii) one Series A Warrant.
More on Smarter Analyst: Does This Analyst Make a Good Case for Matheson Analytics?
Importantly, HMNY is offering the Units at a price of $6.50 per Unit, a 35% discount to yesterday’s closing price.The shares of Common Stock and the Warrants will be issued separately. The Series A Warrants will be initially exercisable on the first trading day following the one year anniversary of the date of issuance and will expire five years from the date such Series A Warrants are first exercisable at an exercise price of $7.25 per share. The Series B Warrant will be exercisable at any time on or after the issuance date until the five-year anniversary of the date of issuance. There is no established public trading market for the Warrants and HMNY does not expect a market to develop in the future. The offering is expected to close on or about December 15, 2017, subject to customary closing conditions.
The gross proceeds to Helios and Matheson from this offering are expected to be approximately $60 million not including deducting underwriting discounts and commissions and estimated offering expenses payable by HMNY.
On the ratings front, Maxim analyst Brian Kinstlinger assigned a Buy rating on HMNY, with a price target of $25, in a report issued on December 5. The current price target implies an upside of 148% from current levels. According to TipRanks.com, Kinstlinger has a yearly average return of 2.2%, a 54% success rate, and is ranked #1878 out of 4722 analysts.
Helios & Matheson Analytics, Inc. provides information technology consulting, training services, software products and enhanced suite of services of predictive analytics. Its solutions cover the entire spectrum of IT needs, including applications, data, and infrastructure.