Recent reports have suggested that the subscription-based movie ticket service MoviePass could be close to going out of business. A new regulatory filing has shed further light on that possibility for the company. Reportedly, they had to borrow several million dollars just to stay afloat, which could mean the ship is getting even closer to sinking. Their CEO previously dismissed that notion, though.
NBC News reported on Tuesday (July 31) that data firm Helios & Matheson Analytics, the majority owner of MoviePass, made a recent regulatory filing this past Friday. In that filing, they indicated that MoviePass had to borrow $5 million so they could continue to pay their “merchant and fulfillment processors.”
Helios also mentioned in the filing on Friday that there could be a “MoviePass service interruption.” This would occur if the company couldn’t make their required payments to the merchant and fulfillment processors.
Just a day prior to that, MoviePass indicated on their Twitter that there were issues going. They tweeted that some users were having trouble checking in to the movies they were trying to watch. MoviePass followed that up later by saying the issue was not related to “card processor partners.”
The company was originally founded seven years ago. It was named among “25 Most Disruptive Apps” in 2012 as it allowed for customers to buy one movie ticket per day for a monthly subscription fee. Users could check into the participating cinema, choose their desired showtime, and then use a special MoviePass debit card to pay for their regular movie ticket.
Back in July, Helios reported in an SEC filing that they could lose $45 million for the current month. The company also reported it had approximately $13.7 million cash available with about $32.2 million on deposit. Still, they said they were spending about $26.9 million a month.
The MoviePass CEO previously shook off any suggestions that they were doomed financially. He said during a phone interview on NBC News, that “naysayers” are “going to be very surprised” with regards to the company’s ability to succeed. They’ll have to battle competitors AMC and Alamo Drafthouse, each of whom have begun to implement a movie theater subscription program of their own.
Helios and Matheson Analytics Inc. (HMNY) is currently traded publicly on the NASDAQ. As of the latest report on Tuesday (July 31), the stock had fallen by 27 percent to just 0.58 cents per share. During July the stock was trading for over tens of thousands of dollars. The company had a 1 for 250 stock split as of July 25, but the price per share plummeted from $14.23 to less than a dollar in less than a week.