MoviePass parent shares plunge on cash deficit, AMC criticism
Shares of MoviePass’s parent company plummeted in trading Tuesday as the upstart subscription movie company provided a bleak update of its financial situation and drew more criticism from AMC CEO Adam Aron.
Helios and Matheson disclosed in an 8-K filing that it has roughly $43.4 million in available cash, including about $15.5 million on hand and another $27.9 million on deposit with its “merchant processors.” The company also said it has lost about $21.7 million in cash per month since September 2017.
The MoviePass parent said it has taken measures it believes will reduce its monthly losses by more than 35%. But the company warned that it would need additional outside investments maintain its current business model.
“If we are unable to obtain sufficient amounts of additional capital, whether through our Equity Distribution Agreement or otherwise, we may be required to reduce the scope of our planned growth or otherwise alter our business model, objectives and operations, which could harm our business, financial condition and operating results,” the filing said.
Helios and Matheson shares were down more than 28% to $1.52 as of early Tuesday afternoon.
The filing came one day after AMC CEO Adam Aron, a top critic of MoviePass, ripped the company during a conference call with analysts. AMC said MoviePass paid an average of $12.02 per movie ticket to AMC in April, while its subscribers went to the movies an average of 2.75 times during the month.
“Just as we were fearing that the MoviePass price point was unsustainable in August, we have the same questions today,” Aron said. “$9.95 for up to 30 or 31 movies a month is not enough money to spread around MoviePass, Hollywood studios and theater operators.”
MoviePass charges subscribers $9.95 per month for daily trips to the movies, though customers cannot use the service to watch the same movie more than once or share their accounts with non-subscribers.