The company's stock price has fallen largely in tandem with its issuance of new shares. That means it's still in danger of being delisted by the Nasdaq, which requires a company's stock to trade above a $1 a share for at least 10 consecutive trading days to avoid such a sanction. In recent weeks, Helios & Matheson's stock has hovered around 2 cents a share. Less than a week later the company's stock was trading below $1 again, before plunging even more. After the Nasdaq sent the company a delisting warning, Helios & Matheson officials urged shareholders to approve its first reverse split in an effort to boost its stock price. In May, Helios & Matheson's stock fell below $1 a share, the minimum threshold to be listed on the Nasdaq market.
Adjusting for that split, the company's number of outstanding shares has increased by more than 3,800,000% in the last year.Īll that dilution has weighed heavily on the company's shares. The share increase just over the last month mean that Helios & Matheson's total share count has increased an unbelievable 80,368% just since its first reverse split in July. Helios & Matheson has massively diluted shareholders But it had prior approval from shareholders to raise hundreds of millions of dollars by selling shares on the open market - something it's done repeatedly over the last year. The company didn't explain how it managed to increase its share count by 719 million shares over that time period. That was up from 636.9 million on August 14. Its total outstanding shares stood at 1.36 billion on September 14, according to the regulatory document. Just in the last month, the company, which took a controlling stake in MoviePass last year, has more than doubled its share count. "We do not have enough authorized, unissued and unreserved shares to fulfill the current reserve requirements under the notes or to meet the company’s needs for future equity financing or acquisitions," Helios & Matheson said in a document filed with the Securities and Exchange Commission on Wednesday. Thanks to all the shares it's issued lately - and the ones it's agreed to set aside for creditors who hold convertible notes it issued - the company has effectively run out of room to issue or sell new stock.
Unfortunately for Helios & Matheson, that trick has now put it in a tight bind, one that's forcing it to seek shareholder approval for a second reverse split of its stock just less than two months after going through with a 250-1 reverse swap. The parent company of MoviePass revealed Wednesday that it continues to rely on one of the oldest tricks it's used to stay in business - issuing new shares of stock.
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