MoviePass Parent Company Stock Hits New Low

As the future of MoviePass remains shaky, its parent company’s stocks are suffering.

On Tuesday (May 22) shares of Helios and Matheson were down over 12 percent to an all-time low of $0.53.

Earlier this month, the company lost nearly half of its remaining value as its stocks continued to fall.

That plummet came after the company disclosed in a regulatory filing that it has been losing an average of $21.7 million in cash on a monthly basis between September and April. Shares in Helios and Matheson fell by almost 30 percent as a result.

“Our burn rate has been slashed 35 to 40 percent by the implementations and abuse prevention measures we have put in place over the last few weeks. We have always known, from when MoviePass took off in August, that it was going to be a high cash burn business model,” said MoviePass CEO Mitch Lowe in a written statement. “We are not changing our guidance on five million subscribers by the end of this year – which should make us profitable/cash flow positive according to our business model. We have access in capital markets to over $300 million. So there is plenty of cash available to sustain the subscriber growth and movie-going habits of our users.”

In the regulatory filing, the company stated that it could decrease its cash loss on the service by 35 percent over the first week in May. And one change that might help is that MoviePass, which briefly removed its movie-a-day monthly subscription from its website, will start allowing customers to sign up for it again.

But some analysts still aren’t convinced. In a post for Seeking Alpha yesterday, financial blogger Julian Lin wrote that “even using incredibly optimistic assumptions,” the company “may still be way overvalued.” In taking a closer look at the balance sheet, he said, “it becomes clear why Wall Street has thus far shown a complete lack of interest in buying their stock.”