Stock for Helios & Matheson, the parent company of bargain movie ticket service MoviePass, is back below one dollar after a rough week that included a sudden service outage affecting tickets for “Mission: Impossible — Fallout.”
After opening Monday morning at $2, the company’s price per share closed at 80 cents at the end of regular trading, a one-day decline of 60 percent and well below the $1 minimum required to keep the company listed on NASDAQ.
The freefall comes just a week after Helios shareholders approved a reverse split of the company’s stock, which had dropped as low as nine cents per share. After the stock was merged at a ratio of 1-to-250, its price jumped last Tuesday to $22.50.
But that recovery was brief. Just two days later, movie theaters across the country began declining MoviePass debit cars, specifically when subscribers tried buy tickets for the newly released “Mission: Impossible — Fallout.” And on Friday, it was revealed in SEC filings that Helios & Matheson borrowed $5 million to complete payments that allow the subscription service to run for its customers.
“If the company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass, which would cause a MoviePass service interruption,” Helios & Matheson wrote in the SEC filing. “Such a service interruption occurred on July 26, 2018. Such service interruptions could have a material adverse effect on MoviePass’ ability to retain its subscribers. This would have an adverse effect on the Company’s financial position and results of operations.”
In a statement Friday, MoviePass CEO Mitch Lowe apologized for the outage, which continued through Sunday as “Fallout” remained unavailable on the service. But Lowe also noted that the situation may likely be the new normal for MoviePass subscribers.
“Certain movies may not always be available in every theater on our platform” in the future, Lowe wrote, as the company adjusts the service to remain profitable without raising the $9.95/month subscription price.
“We share all of this with you as we believe in explaining to you, our customer, why we are doing what we are doing. We ask for your understanding and vocal support during this time, as we continue to fundamentally change an industry that hasn’t evolved much in years,” Lowe wrote.