MoviePass' Stock Plummets. Will The Company Survive?

MoviePass' stock took a massive dive this week, as shares plummeted to five cents Tuesday afternoon. The fall in share prices came after a tumultuous day for the company as Helios and Matheson (HMNY), the owner of the subscription movie service, posted its latest earnings report, showing a $126.6 million loss in the second quarter.

MoviePass has been in hot water for a while now, with shareholders filing suit against the company for alleged fraudulent business practices. In addition, the company has recently made numerous changes to its business model, the latest of which involved altering the terms of service to allow users to see one movie per day to just three movies a month for $9.95. This change may have been acceptable had moviegoers actually been able to find seats. Unfortunately, many subscribers reported having choices limited to just one or two film options per day, with more popular films only showing vacancies during strange hours.

The changes to the plan lead to a mass exodus of users, some of whom later found out their plans were reactivated when they accepted the new Terms of Service for MoviePass.

The parent company's stock continued to fall Wednesday morning, with shares dipping below four cents. Helios and Matheson issued a statement earlier this month claiming talk of the company's demise was "greatly exaggerated" and that it was just going through a "rough patch." But in Tuesday's earnings report, there was less of the positivity found in earlier statements.

"Without additional funding, the company will not have sufficient funds to meet its obligations within one year," Helios said in its report. "These factors raise substantial doubt about the company's ability to continue as a going concern."

According to CNN, the company recently underwent a reverse 250-to-1 stock split in hopes of boosting share price and avoiding being delisted from the NASDAQ.

Last week MoviePass CEO told the NYPost that "investors believe in the sustainability of MoviePass' new pricing plan, but are waiting to see what percentage of the service's 3-million-plus subscribers renew at the three-movies-per-month rate."

As more is learned about the future of MoviePass, we'll continue to update this post. In the meantime, to follow the MoviePass parent company share price, use the HMNY Stock Ticker Symbol.

UPDATE: MoviePass' stock closed at 0.048 USD on Wednesday afternoon.