MoviePass Parent to Spin Off Its Pioneering, Money-Losing Subscription Company

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MoviePass CEO Mitch Lowe

MoviePass Entertainment Holdings has already been created, though it still needs an exchange to trade on.

MoviePass could be a separately traded company under a plan revealed Thursday that would have Helios and Matheson Analytics spinning off its asset but retaining enough shares to keep it under its control.

Step one, already completed, had Helios and Matheson creating a wholly owned subsidiary dubbed MoviePass Entertainment Holdings, which would house MoviePass shares after a public offering and also house the rest of the parent's film assets, including its nascent movie production and acquisition business. 

MoviePass has been around for about eight years as a service providing a movie ticket per day to subscribers who paid $40 a month. The price rose to $50, then in 2017 it was reduced to $10 and membership quickly swelled from 20,000 to 3 million. After that, Helios and Matheson purchased the firm.

The rapid growth, though, led to massive losses, since MoviePass mostly pays full price for the movie-theater tickets it supplies its users. 

Helios and Matheson didn't disclose financials because it made its intentions to spin off MoviePass via a confidential SEC filing, then it issued a press release that is light on details.

Last year, Helios and Matheson revealed that MoviePass was burning through roughly $40 million a month and it would raise $164 million via bonds and preferred stock. It also ditched an effort to raise $1.2 billion that would have allowed it to purchase other assets, such as a small theater chain. 

Helios and Matheson hopes to get its MoviePass stock listed on Nasdaq, but it would settle for a lesser exchange.

It's unclear what strategy the company has up its sleeve to bolster the business, but shares of Helios and Matheson have sunk more than 99 percent to less than 2 pennies each since it took control of MoviePass.

And MoviePass has more competition now than before, most significantly from the Stubs A-List Plan from AMC Theaters which launched late last year and has more than 500,000 users. The other major competitor is Sinemia, which offers a movie ticket per day for $28 or three per month for $8, though its plans and pricing change often.