MoviePass Stock Craters as It Accuses Theaters of Price Gouging
MoviePass parent company Helios and Matheson Analytics blasts exhibitors for charging "exorbitant prices" and for selling "overpriced concessions."
Wall Street appears to have signaled the death knell for MoviePass, the popular subscription service that gives as many as 30 tickets a month to movie theaters for the price of one.
Shares of MoviePass parent company Helios and Matheson Analytics slid an astonishing 56 percent on Thursday to just a dime apiece.
The stock is now down a remarkable 99 percent in a matter of weeks, having briefly traded above $20 a share after a one-for-250 stock split. At the end of trading on Thursday, Helios and Matheson sported a minuscule $169,000 market cap.
The decline in share price certainly supports claims that MoviePass cannot survive, as Helios and Matheson will likely find it impossible to make good on its effort to raise $1.2 billion to keep its most famous asset alive.
The parent company is also in danger, yet again, of being delisted from the Nasdaq exchange.
The day began with Helios and Matheson going on the defensive in a press released entitled, "We're Still Standing." The company said it was responding to comments from some in the exhibition industry who are predicting the demise of MoviePass. Helios provided no further specifics.
"Exhibitors know that without MoviePass they will be able to continue to charge exorbitant prices for theater tickets and gouge customers with overpriced concessions. This is exactly the attitude the taxicab industry took when Uber entered their market," the press release stated.
"Furthermore, any crowing about the uptick in box office receipts this summer season should include the fact that a significant percentage of that total is directly attributable to MoviePass subscribers," the statement continued.
Helios and Matheson went on to say that as much as 6 percent of domestic box office revenue so far this year can be traced to MoviePass' "loyal subscribers."
"It’s clear that because of MoviePass, more people are seeing more movies at fair prices. Instead of wishing us away, the industry, particularly the independent film producers, should be congratulating and supporting us. Absent MoviePass, exhibitors are fighting to preserve profits in a declining box office environment. That’s the doomed strategy," Helios and Matheson said.
Concluding, the press release stated, "Yes, we’re going through a rough patch not unlike what other disruptive enterprises experienced in their early days. Much of our issues can be attributed to the unprecedented growth in a business that just 12 months ago did not exist."
MoviePass recently said it is poised to raise its price from $10 per month to $15 a month, and is already blocking many major new releases.