Story of a Moviepass share holder

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When Ken, a retiree investor, logged into E-Trade in March to research a stock called Helios and Matheson Analytics, it looked like a killer deal.

"I use the analyst research to decide if I am going to buy a stock and after buying it, when to sell," Ken told Business Insider, describing a feature on E-Trade that allows retail investors to see a summary of the ratings — buy, hold, or sell — that Wall Street analysts have given a company.

Ken liked what he saw in Helios, the owner of the popular movie-theater subscription service MoviePass, which makes up essentially the company's entire business. Helios stock was trading under $5, but at the time the two Wall Street analysts covering the stock recommended that investors buy, with price targets of $15 and $16.

Ken saw a lot of upside in the Nasdaq-listed stock. On March 6, he bought 10,000 shares at $4.62, putting $46,200 into the stock, according to E-Trade screenshots shared with Business Insider. (Ken requested we not use his full name when discussing his personal finances, as did the other investors I spoke with.)

The stock didn't reach $16, or $15. It kept dropping. Over the next few months, Helios racked up tens of millions in losses because of MoviePass, which changed its pricing structure in ways that made it likely to lose money on subscribers who used the service to see just one movie a month in theaters; many saw more than that. To raise money, Helios flooded the market with hundreds of millions of new shares, which helped send its stock into a downward spiral.

But as Ken saw the share-price tank, the analysts kept their advice to "buy." And he did.

Ken bought in May, then in June, then in July — as the price dropped from $4.62 to $0.81 to $0.25 to $0.08. He stopped in late July, after Helios did a 1-to-250 reverse stock split that reduced his stake of 1 million shares to just 4,000 (but worth the same total amount). He had put almost $190,000 into Helios. His stake is now worth about $200.

Ken's story is not unusual.

This week, the no-fee stock-trading app Robinhood shut down trading of Helios, as first reported by my colleague Graham Rapier, saying it was doing so "to protect our customers from the risks associated with some low-priced stocks."

[Quickgun_murugan]

Damn