MoviePass service goes down after company faces cash crunch
MoviePass’ online ticketing service temporarily halted Thursday as the company faced mounting financial pressures.
MoviePass parent company Helios & Matheson Analytics Inc. borrowed $5 million from hedge fund Hudson Bay to get MoviePass back online Friday, according to a filing with the Securities and Exchange Commission.
After the online ticketing service went down Thursday evening, MoviePass initially blamed technical problems but later acknowledged in a tweet that other factors caused the shutdown.
The developments were the latest signs of distress for the New York-based owner of MoviePass.
Some analysts have been skeptical of the sustainability of the company’s business model, in which the company charges a $9.95 monthly fee while paying full price for its users’ tickets. The company hoped to earn money by collecting user data.
Earlier this week, Helios & Matheson executed a 250-to-1 reverse stock split so the company wouldn’t be delisted from Nasdaq; companies on Nasdaq must keep their stock value above $1 to avoid delisting.
The reverse split temporarily raised the stock’s value, which was a few cents last week.
In June, MoviePass introduced a surge pricing model reminiscent of the way ride-hailing apps such as Uber and Lyft raise prices when demand is higher.
Helios & Matheson’s stock plunged 71% on Friday, closing at $2 a share. The stock is down 99.9% for the year.
2:25 p.m.: This article was updated with Helios and Matheson Analytics’ stock movement.
This article was originally published at 11 a.m.
Your guide to our clean energy future
Get our Boiling Point newsletter for the latest on the power sector, water wars and more — and what they mean for California.
You may occasionally receive promotional content from the Los Angeles Times.