MoviePass Parent Stock Hits New Low

MoviePass Website - H - 2018

The service pays full price for movie tickets that its subscribers buy.

Shares of MoviePass parent Helios and Matheson Analytics on Tuesday dropped 12 percent to a new low of 53 cents on twice its normal trading volume as Wall Street increasingly views the movie-ticket-per-day subscription service as a giant, unproven gamble.

It's unclear what the specific catalyst was Tuesday, but the plunge in share price follows an even more dramatic one two weeks ago when the stock sunk 30 percent in a day after Helios and Matheson revealed it had just $15.5 million banked with another $27.9 million owed to it, but MoviePass was costing the firm about $22 million a month.

MoviePass mostly pays full price for the tickets it buys its users, who pay just $9.95 a month for the right to get a ticket per day. The service has roughly 3 million subscribers and CEO Mitch Lowe — whose previous experience is with Netflix and Redbox — says it can be profitable as early as next year by selling data, pushing ads and coupons and signing revenue-share agreements with theaters. 

Hollywood remains dubious, even though theaters and studios are clearly benefiting in the near term, given the millions of tickets MoviePass purchases each month, many to smaller films subscribers wouldn't normally see in theaters if they had to pay full fare.

Helios and Matheson says it has access to enough money to keep MoviePass afloat, but in a filing two weeks ago it acknowledged the business model is "highly uncertain" and that its executives are "unable to estimate the actual funds we will require."

Helios and Matheson also controls the film investment entity MoviePass Ventures, which has American Animals opening June 1.

Shares of Helios and Matheson once traded for about $130 each, though that was back in the internet-bubble era.