Trans World Entertainment Stock Given Delisting Warning

Trans World Entertainment Corp. Oct. 12 disclosed it has received formal notice from Nasdaq that its stock has traded below the $1-per-share minimum for the past 30 business days.

The Albany, N.Y.-based distributor, which operates the f.y.e. (For Your Entertainment) home entertainment retail chain, in addition to Etailz.com and related websites, has until April 8, 2019 to bring the stock price in compliance with Nasdaq rules or it will be subjected to delisting.

TWEC reported a loss of $8.1 million in the most recent fiscal period, which was 56% higher than the $5.2 million loss reported in the previous-year period. Revenue dropped nearly 5% to $96.6 million.

Mall-based f.y.e. revenue dropped nearly 17% to $54 million from $65 million during the previous period.

 

 

MoviePass Owner Seeks Second Reverse-Stock Split

Helios and Matheson Analytics, corporate parent of fiscally challenged theatrical ticket subscription service MoviePass, is looking to authorize a second reverse-stock split.

A proposal for 1-for-500 shares reverse-stock split will be presented to HMNY shareholders at an upcoming special meeting Oct. 18 in New York.

“We believe that a reverse stock split could increase the market price of our common stock sufficient to satisfy the minimum bid price requirement in the near term, though we cannot provide any assurance that a reverse stock split will have that effect,” HMNY said in the proxy statement.

Indeed, HMNY’s 1-for-250 shares reverse-stock split in July was done to raise the company’s stock price above the $1 per share Nasdaq minimum.

While the split briefly resulted in HMNY stock reaching $22.50 per share, in less than five days the stock had again fallen below the $1 minimum. It closed Sept. 17 at 1.7 cents per share.

“As a result, we continue to be out of compliance with the minimum bid price requirement,” HMNY said in the proxy statement.

The company said that failure to maintain its Nasdaq listing could further limit its access to capital, undermining the ability to continue operating MoviePass, become cash flow positive or profitable.

“Therefore, the board has concluded that the potential harm to the [HMNY] and its stockholders resulting from a Nasdaq delisting outweighs the potential harm to the company and its stockholders from another significant reverse stock split,” said HMNY.

 

MoviePass Parent Stock Imploding

Helios and Matheson Analytics CEO Ted Farnsworth claims Wall Street understands the firm’s MoviePass business model enabling subscribers to go to the movies daily for a $9.95 monthly fee.

Investors apparently think otherwise, sending HMNY shares down more than 85% at the market close July 26 – and 48 hours since the company engineered a 1-for-250 shares reverse-stock split to avoid having its stock delisted by Nasdaq.

The company’s market capitalization hovers around $7.4 million, while operating a business that spent $21 million monthly in the most-recent fiscal quarter paying exhibitors face value for every ticket consumed by its more than 3 million subscribers.

At the stock’s present rate of freefall, shares will again fall below the $1 minimum in less than two weeks.

“I think [HMNY] has been roundly ridiculed [by Wall Street] since it bought MoviePass and cut the [subscription] price below cost,” Wedbush Securities media analyst Michael Pachter said in an email.