MoviePass Proves Great for Customers, Disastrous for Investors

MoviePass, the service that lets people see a new film every day for $9.95 a month, has seen its subscribers skyrocket to three million. But its parent company Helios & Matheson Analytics Inc., has been bleeding cash, sending its stock crashing 90% this year down to $0.63 and prompting shareholders to stampede for the exit. On average, a movie ticket in the U.S. costs $9.16, and much more in major cities, like $15 in LA and SF, while MoviePass pays theaters full price for every movie ticket its members order, meaning that its core business is designed to operate at a loss. In a regulatory filing last week, Helios, which generates more than 98% of its revenue from MoviePass, said it had only $15.5 million cash and $27.9 million of accounts receivable. Sounds like this dream movie storyline will be coming to an end very soon as the company runs out of cash.

Companies mentioned (YTD): HMNY (-90%)


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