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MoviePass is facing another dramatic proposal to increase its share price.
Leaders at Helios and Matheson (HMNY), the parent company of the movie subscription service, asks shareholders to vote on a plan that could increase the stock up to 500 times.
This plan was described in a new document filed Monday with the Securities and Exchange Commission. The vote will take place at a shareholders' meeting on October 18th.
If the plan is approved, shareholders would exchange up to 500 shares for a single share worth about 500 times more. The final report has yet to be determined and will be presented in a subsequent announcement.
The change would be largely cosmetic for shareholders because their shares would be valued as before the split.
But the plan could push the stock price up from about 2 cents to $ 10, which would keep the stock market at Nasdaq. Nasdaq warned Helios and Matheson that his stock could be removed from the list because of its low price.
If price remains high after stock split is far from certain
MoviePass attempted to increase its stock from 8 cents to $ 21 with a similar move in July. But the new price has dropped below $ 1 in a few days.
The stock is not the only problem that jeopardizes the status of the Nasdaq company.
After the resignation of a board member last month, Helios and Matheson have no longer complied with the rules that require the company to have another independent director. Carl Schramm, an economist and professor at Syracuse University, quit his job and said the executives did not run the business well and provided crucial information.
MoviePass entered the market last year by offering its customers the opportunity to watch as many movies as they wanted for $ 10 a month. But this business model has proven unsustainable and the company has since changed its subscription plans, pricing and availability.
At present, MoviePass offers customers the opportunity to watch three movies a month for $ 10. The service also allows most users to watch only a handful of titles at one time.
In the year since MoviePass began to attract attention, several other companies have started or tinkered with their own services.
CMA cinemas, for example, have created a $ 20 per month service that allows customers to watch three movies a week in AMC theaters.
Sinemia, another competitor, said Monday it would begin offering customers in the United States, the United Kingdom, Canada and Australia the opportunity to watch unlimited two-dimensional movies for a monthly fee of $ 30.
CNNMoney (New York) First published on September 17, 2018: 1:07 PM ET
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