Helios and Matheson Analytics Inc (NASDAQ:HMNY) Is A Rare Opportunity In Tech

Here is an interesting one. Helios and Matheson Analytics Inc (NASDAQ:HMNY) is up 126% since the start of last week. On Monday this week alone, the company gained 20% and a further 8% premarket on Tuesday. Take a look at its newsfeed across the major financial outlets and there is very little in the way of fresh updates that seem to be driving the action.Look little deeper, however, and all becomes clear.Mid-August, the company filed this 8K detailing an agreement with an entity called MoviePass. The agreement will see the former acquire 51% of the latter for a total of $27 million, payable in tranches over the next twelve months. HMNY Daily ChartThis sort of agreement happens quite often but it very rarely translates to an upside revaluation of this magnitude – especially pre-completion – so why is this one any different? The answer is rooted in the dramatic growth of MoviePass over the last six months, as headed up by a name that many will almost certainly already recognize – Mitch Lowe, co-founder of Netflix, Inc. (NASDAQ:NFLX).Lowe joined MoviePass last year, at which point the service had around 16,000 subscribers. For those new to the company, it is a subscription type model that allows customers to go to the cinema as many times as they want for a set fee every month – similar to the Netflix model with brick-and-mortar movie outlets as opposed to online streaming.It's a neat idea but it wasn't working out well before Lowe got involved and reduced the price from nearly $40 a month to its current $9.95. Over the last six months, subscription rates have soared to more than 400,000 and management expects this to increase to as many as 2.1 million within 12 months.With 2.1 million subscribers paying $9.95 monthly, MoviePass is looking at around $21 million monthly revenues or a little over $250 million annually. Right now, and even with the latest appreciation taken into consideration, Helios and Matheson Analytics is trading for a market capitalization of just $74 million – less than one-third of MoviePass' expected 12-month revenue.In other words, it looks like Helios and Matheson Analytics has been able to acquire a controlling stake in MoviePass incredibly cheaply and, in turn, is able to offer its shareholders exposure to the MoviePass growth, as led by the above-mentioned Lowe, and into a proposed IPO at some point during late 2018.This is a rare opportunity in technology and it's even rarer at this end of the sector for an individual trader or investor to get the opportunity to pick up an exposure to a company that's as potentially disruptive as this one is and as led by such a well-known industry name ahead of its listing on the public markets (at which point, valuation is already considerably inflated).The reason this opportunity exists is that Helios and Matheson agreed to the deal just before the explosive growth happened. When the company reduced its pricing to the above-mentioned $9.95, major news outlets picked up on it and the subscription model went viral. MoviePass has had to spend very little on marketing in order to acquire its new customers and chances are that this low cost per acquisition is going to continue near-term as the viral awareness snowballs.It's not a risk-free proposition, of course – anyone taking a position is doing so in Helios and Matheson Analytics as opposed to in MoviePass directly – but it's a unique one and one that is almost certainly going to drive Helios and Matheson Analytics higher throughout the latter half of 2017 and beyond.Chances are we will see a raise from Helios and Matheson Analytics in order to fund the 51% acquisition, so keep that in mind near term.We will be updating our subscribers as soon as we know more. For the latest updates on HMNY, sign up below!Image courtesy of reynermedia via FlickrDisclosure: We have no position in HMNY and have not been compensated for this article.