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In an effort to keep its business afloat, MoviePass' parent company, Helios and Matheson Analytics, plans to raise $ 1.2 billion by selling more shares.
The plan, revealed in a regulatory filing with the Exchange Commission, is to offer institutional investors debt and equity so that MoviePass can keep the lights on as well as continue to grow, Ted Farnsworth, CEO of Helios and Matheson, told Hollywood Reporter
saw if investors will actually buy into this strategy that recent reports suggest MoviePass, which allows subscribers to see unlimited movies for $ 10 a month, burns money. Deposits earlier this year showed that MoviePass had combined $ 43.4 million available between its own cash and what is in deposit with its merchant processors, while the company's monthly expenses at the end of April totaled $ 21.7 million.
shares of Helios and Matheson, fell by nearly 29% to 22 cents a share Monday afternoon. In October, the company's stock was $ 38.86
But MoviePass continued its expansion by reducing its monthly subscription to $ 10 and currently has more than 3 million subscribers. In addition, Helios and Matheson have launched two accompanying projects in recent months: MoviePass Films, a production company, and MoviePass Ventures, a film investment subsidiary.
"They predict our disappearance for eight months and we are still standing," Farnsworth told the Hollywood Reporter. "Now we will have a great war chest behind us."
In addition to potential investor fears, MoviePass faces another hurdle, however: AMC competition. The movie channel recently released its own $ 20-a-month version on MoviePass, with various benefits.
Farnsworth stated THR that news of the CMA subscription plan probably resulted in a 25% increase in MoviePass subscriptions. the articles mentioned that MoviePass was cheaper.
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