Nanocap stock $HMNY (Helios and Matheson Analytics) released news regarding their acquisition of privately held software company Zone Technologies on Tuesday June 7th with no deal terms disclosed. In other words if you read in between the lines, the company was bought dirt cheap and probably has worthless products. Note that $HMNY received a NASDAQ notice of delisting or failure to satisfy a continued listing rule or standard in November 2015 and also a failure to meet terms of the extension last month. The company is garbage basically.
Helios and Matheson stock went from $1 to $17 in 2 days on this Zone Technologies acquisition news! Yes, it meant that a lot of dumb sheep were buying and pumping this stock up for no reason. $HMNY bought Zone Technologies for their iOS app called 'RedZone Maps' -- an app that displays real-time (as they say) crime data on a navigation map. Taking a look at the reviews on the Apple iTunes store, it looks like an app that hardly anyone downloads and an user-unfriendly app that is not updated with real-time crime data as advertised. No wonder terms of the deal were not disclosed!
We shorted it on day 1 but did not add to the position on day 2 of the run-up. The stock finally cratered starting on day 3 and we covered into weakness. We know we should have held the short position another week as we believe the stock should tank all the way back down to $1. But content with the profits and wanted to move on we just took the money and ran.
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Net Profit: $6,360