Post by Admin on Aug 14, 2018 23:27:40 GMT
www.hollywoodreporter.com/news/moviepass-parent-posts-big-loss-as-shareholders-sue-1134979
Helios and Matheson Analytics on Tuesday posted a large quarterly loss.
MoviePass parent Helios and Matheson Analytics on Tuesday posted a staggering quarterly loss just as a class-action lawsuit was made public as shareholders seek some compensation after watching the value of their stock sink 99 percent in less than a month.
Helios and Matheson said it posted an operating loss of $126.6 million in the most recent quarter compared to a loss of $2.7 million a year ago, just before MoviePass launched its money-losing product that gave subscribers a movie ticket per day for just $10 a month.
MoviePass, which boasts about 3 million subscribers, recently changed its offering to just three tickets a month in an effort to reverse the mounting losses, but shares of the parent company have sunk from a split-adjusted $45 just 30 days ago to a nickel as of Tuesday.
Such drastic losses were bound to spur lawsuits, and one has been filed against Helios and Matheson, CEO Ted Farnsworth and CFO Stuart Benson.
The lawsuit contains several positive-sounding press releases that boast of the potential of MoviePass and argues that claims made in them "are materially false and/or misleading" because "there was no reasonable basis to even imply that the MoviePass business model could lead to profitability."
MoviePass has long maintained that it could turn a profit by next year by selling data it collected on its users, marketing movies and restaurants to them, striking deals with exhibitors for sharing concession revenue, and more.
The lawsuit says it was "inevitable" that Helios and Matheson would run out of cash and that MoviePass couldn't monetize its business model "before being too buried in debt to survive."
Helios and Matheson Analytics on Tuesday posted a large quarterly loss.
MoviePass parent Helios and Matheson Analytics on Tuesday posted a staggering quarterly loss just as a class-action lawsuit was made public as shareholders seek some compensation after watching the value of their stock sink 99 percent in less than a month.
Helios and Matheson said it posted an operating loss of $126.6 million in the most recent quarter compared to a loss of $2.7 million a year ago, just before MoviePass launched its money-losing product that gave subscribers a movie ticket per day for just $10 a month.
MoviePass, which boasts about 3 million subscribers, recently changed its offering to just three tickets a month in an effort to reverse the mounting losses, but shares of the parent company have sunk from a split-adjusted $45 just 30 days ago to a nickel as of Tuesday.
Such drastic losses were bound to spur lawsuits, and one has been filed against Helios and Matheson, CEO Ted Farnsworth and CFO Stuart Benson.
The lawsuit contains several positive-sounding press releases that boast of the potential of MoviePass and argues that claims made in them "are materially false and/or misleading" because "there was no reasonable basis to even imply that the MoviePass business model could lead to profitability."
MoviePass has long maintained that it could turn a profit by next year by selling data it collected on its users, marketing movies and restaurants to them, striking deals with exhibitors for sharing concession revenue, and more.
The lawsuit says it was "inevitable" that Helios and Matheson would run out of cash and that MoviePass couldn't monetize its business model "before being too buried in debt to survive."