MoviePass Parent Company Sees Stock Plunge as Cash Runs Out

Courtesy of MoviePass

The company said it has $15.5 million in cash with another $27.9 million owed to it by the merchant processors who have collected MoviePass payments.

MoviePass, which famously sells 30 tickets for the price of one, is taking a tremendous toll on parent company Helios and Matheson Analytics, which said Tuesday its cash reserves are running low, a revelation that sent the stock reeling.

In midday trading, shares of Helios and Matheson were sinking 30 percent to $1.49 on volume that was about four times its daily average. 

In a filing on Tuesday, the company said it has $15.5 million in cash with another $27.9 million owed to it by the merchant processors who have collected MoviePass payments, most of which come from subscribers who pay $9.95 per month. 

MoviePass pays full price for most of the tickets its subscribers use, and each of the nearly 3 million of them are able to use a ticket per day, which costs the company roughly $21.7 million monthly, according to Tuesday's filing. 

Helios and Matheson says it will sell stock to keep MoviePass afloat and that it enacted changes this month that it expects will save the company about 35 percent on those hefty costs it has been racking up. The changes include initiatives designed to cut down on users sharing tickets and to prevent them from seeing the same movie twice. 

For about three weeks, MoviePass had yanked the offer that made it famous and instead provided just four tickets monthly to new subscribers, along with access to iHeartRadio All Access. While MoviePass CEO Mitch Lowe told The Hollywood Reporter a few weeks ago that the change did not slow down growth, Tuesday's filing suggests that it did.

"By returning to our $9.95 per month unlimited MoviePass subscription, enabling subscribers to see up to one new movie title per day, we believe our subscriber acquisitions and subscription revenues will continue to increase for the foreseeable future," the filing states.

Lowe has maintained that MoviePass will be profitable next year as it racks up deals for discounted tickets, shared concession revenue, advertising and more, but Tuesday's filing calls the business model "highly uncertain" and acknowledges that executives are "unable to estimate the actual funds we will require."

MoviePass Ventures, which invests in film titles, is also a "highly uncertain" business, the company said in its filing.