MoviePass has paid back a $6.2 million emergency loan in full, the struggling ticketing company said in public filings on Wednesday.
It’s a rare bit of good news for a service that was forced to seek out the infusion of cash because it could not meet its financial obligations. On Tuesday, MoviePass announced that it was raising its prices from $9.99 to $14.95 per month over the next 30 days, as well as limiting access to nearly all Hollywood blockbusters within their first two weeks of release. MoviePass’s parent company, Helios and Matheson, said these steps will reduce its cash burn rate by 60%.
Under the terms of the loan, the creditor could have demanded to be paid back $3.1 million on Wednesday.
MoviePass’s popularity exploded last summer after it slashed its monthly subscription costs from as much as $50 to less than $10 and offered customers the chance to see a movie-a-day. In short order, the company exploded from roughly 20,000 members to nearly 3 million. However, its business model has always been questionable. MoviePass subsidizes ticket-buying, paying theaters full freight for the cost of going to the movies. The company said it would be able to make money by offering advertising and by exploiting the data of its users.
However, last spring an independent auditor raised “substantial doubt” about MoviePass’s ability to continue operating as “a going concern.” The company also revealed it lost $150.8 million in 2017, and that it operated at a $21.7 million monthly deficit.
Helios and Matheson’s stock was down nearly 50% at 25 cents at the opening of the market. In October, the company’s stock peaked at $38.86.