Troubled MoviePass suffered another blow when a director at the parent company, Helios and Matheson Analytics, accused executives of hiding information then immediately resigned as a board member.
“Just last week, I learned that management withheld information from the board for several months,” Carl Schramm wrote in his resignation letter, according to a regulatory filing Thursday.
“I have sought, often unsuccessfully, information about the Company’s financial status and operations, and explanations of Company strategy,” wrote Schramm, an economics professor at the school of information studies at Syracuse University.
“I have objected to the manner in which a number of business decisions have been presented to the Board of Directors by management, without sufficient time for the Board to examine complex documents, to review significant transactions, or to discuss how the proposed actions fit into the Company’s strategic plan,” wrote Schramm, who served on the board for less than two years.
He wrote that the situation had worsened in the past eight weeks, coinciding with the period in which Helios and Matheson initiated a reverse stock split at the ratio of one share for every 250 owned.
The reverse split sent shares to $20 apiece but they have fallen to just 2 cents as MoviePass has lost millions of dollars and recently changed its famous one-movie-ticket-per-day offering to three a month while keeping the price steady at $10 monthly.
MoviePass has said it has 3 million subscribers and that it expects 5 million by year’s end, though it hasn’t revealed how many have canceled the service since it watered down the benefits, and it hasn’t said if the company is sticking with its end-of-year forecast.
A poll from NRG this week, though, indicates that about 47 percent of MoviePass subscribers are considering canceling their membership in light of changes to the service, which also include restricting the titles available to see on weekends.
Schramm wrote in his resignation letter that actions taken by management “have interfered with my ability to exercise my responsibilities as a board member” and that “despite my best efforts, my ability to effectively discharge my duties as a director has been compromised beyond repair.”
