Why Is HMNY Still Trading? Analyzing Its Market Status

Helios and Matheson Analytics (HMNY), the former parent company of MoviePass, was once a high-flying stock before collapsing under financial strain. Despite its downfall and bankruptcy filing, shares of HMNY continue to trade in over-the-counter (OTC) markets, leaving many investors wondering why it remains a tradable asset.

Understanding this requires looking at penny stock dynamics, investor speculation, potential corporate restructuring, and regulatory oversight.

Public Listing Status

HMNY was delisted from Nasdaq in February 2019 after failing to meet the exchange’s minimum bid price and market capitalization requirements. Nasdaq requires companies to maintain a minimum bid price of $1 for 30 consecutive trading days. HMNY’s stock had been trading well below that threshold, and after failing to regain compliance, it was moved to the OTC market.

Unlike major exchanges such as the NYSE or Nasdaq, OTC markets have fewer listing requirements. Companies can continue trading even if they are in bankruptcy, have no active operations, or fail to meet financial reporting standards. HMNY’s shares now trade on the OTC Pink Sheets, the lowest tier of the OTC market, which includes companies that may not provide regular financial disclosures. The lack of stringent oversight allows stocks like HMNY to persist despite financial troubles.

Market for Penny Stocks

Penny stocks, typically defined as shares trading below $5, attract investors due to their low price and potential for large percentage gains. These stocks often belong to companies with uncertain financial conditions or limited operations and tend to trade on OTC markets, where listing requirements are less strict.

Liquidity in penny stocks can be unpredictable, with trading volumes fluctuating based on news, rumors, or speculative activity. Many of these stocks experience long periods of inactivity, followed by sudden spikes in volume when traders attempt to capitalize on short-term price movements. The absence of institutional investors, who generally avoid such securities due to financial opacity and heightened risk of manipulation, contributes to this volatility.

Market makers facilitate trades for penny stocks, as the OTC market does not operate with a centralized order book like major exchanges. These intermediaries provide liquidity by quoting bid and ask prices, but the spreads between these prices can be wide, making it costly for investors to enter and exit positions. Additionally, many penny stocks are subject to high transaction fees, limited availability on brokerage platforms, and restrictions on short selling, further complicating trading strategies.

Investor Speculation

Despite its financial collapse, HMNY continues to attract traders who see opportunities in its low stock price. Some investors believe that discounted shares could yield returns if the company experiences unexpected developments, such as legal settlements, asset sales, or leadership changes.

Social media and online trading forums fuel interest in distressed stocks like HMNY. Retail traders often gather on platforms such as Reddit, Discord, and Twitter to discuss potential catalysts, share rumors, and coordinate buying efforts. These discussions can create momentum-driven price movements, even when there is no fundamental basis for the stock’s increase. In some cases, coordinated efforts lead to brief but dramatic spikes in share price, attracting more traders seeking short-term gains.

Regulatory filings, such as SEC Form 8-K disclosures, can also trigger speculation. If HMNY submits updates about legal proceedings, outstanding liabilities, or corporate governance changes, traders may interpret these filings as signals of possible future developments. Even minor updates can lead to volatility, as investors attempt to anticipate how these changes might affect the stock’s tradability.

Potential Corporate Restructuring

While HMNY no longer operates as a viable business, corporate restructuring remains a factor in its continued trading. Even companies that have declared bankruptcy can undergo reorganization, asset liquidation, or mergers that impact shareholders. Some bankrupt entities negotiate settlements with creditors that restructure debt obligations, potentially leading to new ownership structures or the issuance of new securities.

Reverse mergers represent another possible avenue for restructuring. Shell companies—corporate entities that exist primarily on paper but have no substantial operations—can be acquired by private firms seeking public market access without undergoing the traditional IPO process. If a private company were to merge into HMNY’s corporate structure, it could repurpose the stock as a vehicle for new business operations. However, such transactions typically require regulatory approvals and creditor settlements, making them complex and uncertain.

Regulatory Oversight and Filings

Despite its delisting from Nasdaq and transition to the OTC market, HMNY remains subject to certain regulatory requirements, particularly regarding disclosures and financial reporting. While companies trading on the OTC Pink Sheets are not required to file regular financial statements with the SEC, they may still be obligated to submit filings under specific circumstances, such as bankruptcy proceedings, legal disputes, or corporate actions.

SEC filings such as Form 8-K, which reports significant corporate events, and Form 10-K, which provides annual financial statements, can offer clues about HMNY’s ongoing obligations and any restructuring efforts. Additionally, bankruptcy court filings may reveal details about creditor settlements, asset liquidations, or potential legal claims that could impact the stock’s future. Investors who continue to trade HMNY shares often monitor these disclosures closely, looking for any indications of changes in corporate structure or outstanding liabilities.