On July 17th, MoviePass shares were trading at $27.98. In just under one month, that price has fallen dramatically and today see’s the company trading at a paltry 5cents per share.
Helios and Matheson (NASDAQ:HMNY) are owners of MoviePass.
MoviePass Shares Reflect Q2 Loses
The subscription movie service, MoviePass, posted a colossal loss of $126.6 million in its second quarter this year.
It was proof of a turbulent year.
This same period a year ago saw the company post loses of $2.7 million and while no company wants to be posting losses, such a dramatic downturn was unprecedented.
According to its results; by the end of Q2 the company had only $15.5 million on its balance sheet and to put that in perspective, over the year it has lost $132.47 a share.
Additional Capital
Helios and Matheson had issued several warnings stating it needed to find ways to raise additional capital and recently uttered the same sentiment again:
“without raising additional capital, there is substantial doubt about the company’s ability to continue as a going concern.”
In a statement in early August it said it was simply “going through a rough patch not unlike what other disruptive enterprises experienced in their early day.” and appeared to be blaming ‘new business’ syndrome for its failure.
It also stated that “Talk of our demise is greatly exaggerated.”
However, the numbers suggest it is not.
Stay Afloat
MoviePass had, throughout the year, changed its service in order to try and regain lost capital. It upped the charge of its prescription service whilst simultaneously reduced subscriber perks. It limited access to blockbuster movies and set caps on the number of times a subscriber could go to the same movie. It even went as far as limiting members to only three movies a month.
From a service that once offered unlimited movies, its demise has been very clear.
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Delisting is on the Horizon
Trading at 5cents a share means the company is now skirting the edge of delisting from NASDAQ. In an effort to raise its share value, Helios and Matheson recently had a reverse 250-to-1 stock split, but it didn’t seem to work as the stock continues trading at meager levels.
Time to close the curtain on the movie perhaps?
Featured Image: Deposit Images/fotographic1980
