Here's The Catalyst That's Key To A Helios and Matheson Analytics Inc (NASDAQ:HMNY) Continuation

Helios and Matheson Analytics Inc (NASDAQ:HMNY) has been one of our biggest winners of the year during 2017.We first highlighted it back on September 25, noting that it presented markets with a rare opportunity in the technology sector – one that served as an opportunity to jump into the early stages of a technology company that, in normal conditions, only venture capitalists would have access to. HMNY Daily ChartAt the time, the company was trading for a little over eight dollars a share. At close on Monday, Helios and Matheson went for $21.09 and the company will open on Tuesday for $22.50. From the price at which we first highlighted this one, that's a more than 180% appreciation.So what is driving the action and what's next?The thesis here is relatively simple.A few weeks ago, Helios and Matheson announced that it had agreed to invest $27 million in a company called MoviePass and that, in return for its investment, the company would be picking up 51% of MoviePass' shares.Some reading may already be familiar with MoviePass, especially anybody that caught our coverage last time. For those new to it, however, it's a subscription model movie theater company not dissimilar to Netflix, Inc. (NASDAQ:NFLX) in the sense that users pay a monthly subscription fee and are allowed to go and see an unlimited number of movies at participating theaters in return.It seems like a nice model at a glance, but things were relatively slow at the start – the company only picked up around 20,000 subscribers in its first couple of years of activity. However, on the back of a recent price drop from $30 a month to $10 a month, this has soared through 400,000 and management expects the number to reach 1.2 million within 12 months.And it's worth noting here that the above comparison to Netflix isn't purely illustrative – one of the most attractive things about this company right now, and the driver behind the price cut that has pushed user count up by close to 2000%, is that it's CEO is Mitch Lowe, one of the founding executives of Netflix.So the company is currently in the midst of a dramatic run – what's next?This is where we have to start looking at catalysts.For Helios and Matheson, the catalysts are rooted in MoviePass and for MoviePass the catalysts are rooted in movie theatre adoption.Technically, movie theaters can't stop users from using their MoviePass cards to visit their cinemas – the cards are Mastercard Inc (NYSE:MA) cards and they basically work by MoviePass picking up the bill for whatever the user tallies up each month.However, some of the big chains, and most notably AMC Entertainment Holdings Inc (NYSE:AMC), have been vocal about their intentions not to allow MoviePass cards. This would be against Mastercard terms and conditions (all outlets have to accept all Mastercards) but the cinema chain is mounting a legal challenge as we speak.We see the outcome of this legal challenge, or any development therein, as a potential catalyst for MoviePass and – by proxy – Helios and Matheson.Bottom line here is this one is all about word-of-mouth marketing and the legal challenges are only going to draw attention to the company – be that good or bad, it doesn't really matter.With AMC suggesting it is going to reject MoviePass customers, the action only serves to underline how good of a deal said customers are picking up for their $10 a month subscription fee and we see this as serving to boost user count medium to long-term.As we said last time, the reason this one is attractive right now is that it is a tech startup headed up by an industry renowned executive in a very early stage growth phase. These exposures are normally limited to VCs and that's why Helios and Matheson is on fire.There is a medium-term risk of a correction as the short-term operators pull profits off the table, but long-term this one could well be a one-off high reward opportunity for anybody willing to ride out any such corrections.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on HMNY, sign up below!Image courtesy of Katherine Bowman via FlickrDisclosure: We have no position in HMNY and have not been compensated for this article.