NEW YORK (CelebrityAccess) It appears to be make-or-break time for one of the more innovative projects in the film industry, MoviePass.
MoviePass, owned by parent company Helios & Matheson, allows patrons to see unlimited movies, at all theatres (well not exactly all theatres), for $9.99 a month (with surge pricing and some restrictions). Whether or not its a hit, Helios & Matheson (HMNY) is in serious jeopardy of being delisted from Nasdaq and needs to keep a stock price above $1 and a minimum market cap of $500 million per the stock exchange’s requirements. Instead, it is hovering around the 10 cent mark versus a 52-week high of $38.52.
With that concern floating in the air, Helios & Matheson CEO Ted Farnsworth convened 30 shareholders on the 67th floor of New York’s Empire State Building to talk about the future, according to Business Insider.
“Make no bones about it, it is a full-blown war going on, especially with AMC,” Farmsworth said.
Business Insider said the room of investors was “largely optimistic” despite shares dropping 99 percent from their October highs.
“The theaters don’t like us because we’re too powerful too quick,” he said. “We know with all the independent research that’s out there, if we ask somebody to go to a Regal instead of an AMC, 50% of the time they’ll go to Regal. They realize that at the end of the day we’re gaining all this power with the consumer base. That was always the play, having leverage over the theaters.”
At the meeting, stockholders approved two measures: to issue 4.5 billion new shares of stock, increasing the total outstanding shares to 5 billion from 500 million, and to give the company the ability to perform a reverse stock split.
Some investors were not as enthusiastic as others, according to Business Insider.
“As the stock price has plummeted, I’ve been concerned about the lack of communication from the company explaining what’s going on or assuring investors,” one said. “There’s never been any sort of formal communication to the shareholders explaining what you think is going on, what the problem is with the stock going down so much, and what steps you’re going to take to fight that battle.”
Farnsworth dismissed the concern that MoviePass will never become profitable, saying its on track to hit 5 million subscribers, the profit point.
“It’s a fastest-growing paid subscription ever in the history of the internet — period,” Farnsworth said. “So you’re not going to go through that without headaches.”