Shares gained 6 cents, or 15%, to close at 47 cents on Tuesday. The issue had lost more than 80% of its value during the previous three weeks and declined steadily since a May 8 filing with the Securities and Exchange Commission. The filing revealed it had $15.5 million in available cash at the end of April, plus $27.9 million on deposit with merchants while monthly expenses totaled $21.7 million.
The May 8 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 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. The company is losing money because it pays movie theaters full price for the tickets its customers buy at a discount.
In an interview May 14 at the Cannes Film Festival, Helios and Matheson chief Ted Farnsworth told Variety that the subscription service was viable and had roughly $300 million available from an equity line of credit.