Schramm, former president and CEO of the Ewing Marion Kauffman Foundation, resigned from Helios & Matheson’s board. According to the suit, which seeks class-action status, “MoviePass’ business model was not sustainable because there was no reasonable basis to believe MoviePass could monetize the model to a degree that could be maintained before being too buried in debt to survive.”Īlso in August, Carl J. District Court for the Southern District of New York, alleging the company deceived investors. 13 on behalf of shareholder Jeffrey Braxton in the U.S. Helios & Matheson and top execs were named in a lawsuit filed Aug. HMNY stock is currently trading for about 2 cents per share, giving it a market cap of less than $25 million. Investors haven’t hid their unhappiness with Helios & Matheson’s alleged lack of disclosures. To stay afloat, MoviePass drastically changed its offer in August to limit customers to only three movies per month for the same price and curtailed access to wide-release movies during peak demand. But the deal was too good to be true: The surge in users caused an enormous cash drain on HMNY and the company was forced to take out several loans. The initiation of the New York AG’s investigation into Helios & Matheson was first reported by CNBC.Įarlier this year, MoviePass touted that it had topped 2 million subscribers for its service letting customers see one movie per day for just $9.95 per month. We look forward to the opportunity to demonstrate that to the New York Attorney General.” We believe our public disclosures have been complete, timely and truthful and we have not misled investors. "Since we acquired control of MoviePass in December 2017, Helios and Matheson Analytics largely has become synonymous with MoviePass in the public’s eye, leading us to believe that our shareholders and the market perception of HMNY might benefit from separating our movie-related assets from the rest of our company," CEO Ted Farnsworth said in a press release.In a statement to Variety, Helios & Matheson said, “We are aware of the New York Attorney General’s inquiry and are fully cooperating. MoviePass will be listed on Nasdaq or an alternate trading market if the branch can satisfy the applicable initial listing criteria of the applicable exchange or trading market, Helios & Matheson Analytics added. The company also said it is considering distributing a minority of the outstanding shares of MoviePass Entertainment common stock as a dividend to stockholders of Helios & Matheson Analytics. The new unit will be a vertically integrated film production, marketing, and exhibition company. The parent company announced that its board of directors has preliminarily approved a plan to create a new subsidiary, MoviePass Entertainment, that would take ownership of the shares of MoviePass and its other film-related assets. Shares of Helios & Matheson Analytics, the owner of MoviePass, exploded by as much as 50% to $0.025 apiece Tuesday after the company announced its plans to spin-off MoviePass and make it a separate public company.
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