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MoviePbad increases its subscription fees and limits first-run publications in an effort to reduce costs and accelerate profitability, the company announced Tuesday morning.
Shareholders of Helios and Matheson Analytics Inc.
HMNY, -34.94%
welcomes the news, pushing stocks higher than 100% after the news, before yielding most of these gains to return below $ 1 . The company's shares have fallen 100% so far this year, while the S & P 500
SPX, + 0.67%
gained 5%.
The new monthly fee for watching a movie a day will be $ 14.95 and will be implemented over the next 30 days, the company said. The current fee is $ 9.95.
To further reduce costs, Helios and Matheson stated that MoviePbad would limit first-run movies on more than 1,000 screens in the first two weeks of release, unless the films are made available on a first-run basis. promotional basis.
MoviePbad also plans to double the blockbuster movies, the company said. "In order to maintain the integrity of the MoviePbad mission, enhance discovery and encourage participation in smaller films and support the independent film community, MoviePbad will begin to limit the availability of tickets to hit movies, "said Helios and Matheson. in a report. "This change has already begun to unfold, with 'Mission Impossible 6' being the first film included in the measure."
The company stated that it was expecting to reduce by 60% its monthly cash consumption with removals. Helios and Matheson had an average liquidity gap of $ 21.7 million per month from September to April.
Do not miss it: The spectacular rise and fall of MoviePbad
This weekend, many MoviePbad users have complained about not being able to reserve seats to watch "Mission: Impossible – Fallout" which was released in the United States on Thursday. Users did not know why until Sunday, when MoviePbad tweeted to an unhappy user: "While we continue to evolve the service, some movies are not always available in all cinemas of our platform. Mission Impossible will remain available in our electronic ticketing rooms.
Helios and Matheson described the measure as a "corporate strategy to limit spending and stay true to its mission of empowering smaller arts communities." 19659013] Neither Ted Farnsworth, CEO of Helios and Matheson, nor Mitch Lowe, director of MoviePbad, was available for comment at the time of publication.
This comes at a time of increasing competition from other subscription services, such as AMC
AMC, + 7.98%
A-List and Sinemia Stubs. AMC announced Tuesday that it has added 175,000 new Stubs A-List members since it was launched five weeks ago, well above expectations. The company had originally planned that it would add 500,000 members by the month of June of next year. Stubs A-List charges a monthly fee of $ 19.95 so that members can watch up to three movies a week.
See also: How the AMC subscription service compares to MoviePbad – and its other competitors
Helios and Matheson struggled year-round last to stay afloat, and the company has turned to more and more expensive loans. in order to secure the money. On Friday, MoviePbad's parent took out a $ 6.2 million expensive loan from Hudson Bay Capital Management, which paid him $ 1.2 million to receive $ 5 million in cash. Helios and Matheson also agreed to pay late fees of 15% annualized interest after any default and repay the debt at a high redemption price of 130%. The loan conditions are strict; Hudson Bay may require payment of half the loan amount on August 1 and the rest on August 5.
The company set up a share consolidation of 1 against 250 last Tuesday at the close of the market. $ 21.25 from 8 cents. Analysts have seen in this decision a way to prevent write-off of the company because a company may be delisted if it exchanges less than $ 1 for 30 days consecutive, according to Nasdaq rules. But Tuesday, the stock was back below the $ 1 mark, at 81 cents a share, after a slight upward rise when the company announced its cost-cutting measures.
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