A simple reflective question made me reassess my initially bearish position on the comany - Will it be around in a year?
The company could stand to benefit from a range of revenue verticals, some of which would have a material effect on its financial story.
The risk/reward is skewed to the upside at the current price.
The aftermath of my Helios and Matheson Analytics's (HMNY) MoviePass article; "Can A Flawed Business Model Generate Investor Returns? An Empirical Analysis Of MoviePass" was to be expected. Bulls sought to defend their position, bears theirs, and words like "shill" and "manipulator" got thrown around. However, in the midst of this a simple question made me reassess my entire bearish premise; will MoviePass be around in a year? This was a watershed moment in my opinion towards the company. At face value, it is a very basic question. Bears will either answer no, go short! Or yes, go short! However, when I sought to answer it, I was fully converted to a bull.
I thought it would be prudent to write an article exploring the findings from my answer to this question as I placed an order with my broker to buy a considerable amount of calls. This article will explore how I have come to join the ranks of individuals initially described as being induced with "FOMO induced haze".
Movie Marketing-as-a-service (MMaaS)
MoviePass should not be thought solely as a movie ticket subscription company. While its subscription offering for moviegoers could potentially break even and become profitable, central to its long-term growth is selling movie marketing-as-a-service.
The current context for movie studios is bleak as year-on-year increases in marketing costs have intertwined with year-on-year decreases in movie theater attendance. This represents a negative return on marketing investment (ROMI). Further, most of this is spent to buy television time (70% or more in most cases), which is a non-targeted form of advertising. Variety states that the "reason the marketing revolution has yet to materialize is that distributors still lack the kind of granular customer profiles" necessary for more "interesting, precise, cheaper, and efficient marketing.”
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