MoviePass Parent’s Stock Slides Again on Cash Shortage Fears

MoviePass parent Helios and Matheson Analytics’ stock has declined to its second-lowest closing price amid ongoing concerns on Wall Street about a cash shortage.

It slid 7 cents, or 12%, to close at 54 cents on Tuesday. It’s just a penny above the lowest close for the stock since the company went public in 1997. Helios and Matheson’s stock closed at 53 cents on Dec. 19, 2008.

The stock hit a 52-week high of $38.86 a share in October, two months after it lowered its monthly subscription fee from $50 to $9.95. But on May 8, Helios and Matheson said in a Securities and Exchange Commission filing that it had $15.5 million in available cash at the end of April, plus $27.9 million on deposit with merchants while monthly expenses are about $21.7 million. The filing also said if adequate funding did not materialize, the company could be required to reduce the scope of its growth or otherwise alter its operations.

An independent auditor also raised questions in April about MoviePass’ ability to continue operations. The company is losing money because it pays movie theaters full price for the tickets its customers buy. MoviePass claims that it will eventually be able to monetize its more than two million subscribers by running ads, partnering with theater chains, or figuring out a way to make a profit on the data it collects on its users.

In an interview last week at the Cannes Film Festival, Helios and Matheson chief Ted Farnsworth told Variety the subscription service was viable and had roughly $300 million available from an equity line of credit. The Helios chief was at the festival to premiere John Travolta’s “Gotti,” which MoviePass is releasing in conjunction with Vertical Entertainment.

“There’s been a feeding frenzy of negativity, but it’s not going to slow us down,” Farnsworth said. “I’m not worried at all. You’re going to see. We’re doing more acquisitions of movies and companies.”

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