MoviePass stock keeps falling and falling
How far can MoviePass fall?
Stock in Helios and Matheson, the parent company of the movie subscription service, plunged 60% Monday amid new reports that customers were having problems with the app, which charges $10 per month for the ability to see a movie every day.
The stock fell as low as 78 cents a share Monday, raising new concerns that it could eventually be delisted from the Nasdaq stock exchange. It closed at 80 cents.
That’s exactly the problem the company tried to avoid last week when it approved a 250-for-1 reverse stock split, which boosted the price from 8 cents a share to $21. The last several days of trading have essentially wiped away that cosmetic improvement.
Helios and Matheson’s problems got even worse last Friday, when it borrowed $5 million in cash to pay its merchant and fulfillment processors. It took out the loan because of a service outage Thursday that left MoviePass unable to pay for movie tickets, according to a regulatory filing.
The service was back up by Friday afternoon, but struggled again with problems this weekend. MoviePass tweeted late Saturday that some users had reported issues checking in, adding that it was “working towards a fix on this technical issue.” E-ticketing remains functional, according to the service.
Some users reported additional complaints, including the inability to get tickets for “Mission: Impossible — Fallout,” the weekend’s biggest movie opening.
On Twitter, MoviePass told one customer that the “Mission: Impossible” movie would be available at theaters that use its e-ticketing service. The company added that the movie “will also be available at some point in theaters during its theatrical run and without peak pricing depending on demand.”
The company’s “peak pricing” model has also been criticized by users. When surge pricing was announced last month, MoviePass told users that they may be asked to pay a “small additional fee” to see movies that were in high demand.
Some customers, however, have reported extra charges of as much as $8 on movies — nearly as much as the cost of the service’s monthly base price.