Are New Lows On The Way (Again)?
MoviePass whose parent company is Helios and Matheson Analytics (HMNY) is now officially a penny stock. The company failed to meet the requirement on the Nasdaq Stock Exchange whereby the company’s shares are not to fall below $1 for an extended period.
Nasdaq affirmed its decision to delist Helios on Feb. 11, rejecting the company’s appeal, and the stock moved to the over-the-counter (OTC) market on Feb. 13 under the same stock symbol currently trading around a minescule $0.0093.
The Story Behind MoviePass
In 2017, Helios acquired MoviePass and around 3 million consumers signed up for the service which offered a movie a day for the low monthly subscription price of $9.95. Shares of the company skyrocketed, however, this did not last long.
MoviePass intended that consumers would utilize their service like a gym membership, pay every month and rarely go. But this was not the case as MoviePass claimed to make up between 3%-7% of all movie tickets sold as members kept hitting the theaters.
MoviePass then played around with its plans, changed terms of service, and in turn, confused their members all while competing with AMC Stubs A-list that launched last summer which intensified losses. Due to this, the company is currently being investigated by the New York Attorney General’s office for misleading investors about MoviePass’ financial prospects.
The Last Act For MoviePass As A Penny Stock?
Helios then sold new shares to cover its losses and its stock plummeted. Out of the blue, the company decided to expand and become a film company and Helios announced the formation of vertically integrated film production, marketing and exhibition group dubbed MoviePass Entertainment.
This would become the umbrella company for MoviePass. The company recently announced that principal photography had begun in Puerto Rico on a new World War II film, Axis Sally, starring Al Pacino.
Helios has insisted that “HMNY’s delisting has no effect on the day-to-day business operations of HMNY or its subsidiaries, including MoviePass and MoviePass Films.”