Helios & Matheson (HMNY), owner of MoviePass, has tanked roughly 60% on Monday to a share price of $0.80 after users experienced service issues over the weekend.
Last Thursday, Helios & Matheson had to borrow $6.2 million to make payments to theaters in order to keep its MoviePass business operational. $1.2 million had to be immediately paid back, with $3.1 million more due to be paid back later this week, leading investors to believe that the company is on the verge of bankruptcy.
MoviePass was founded in 2011 by Netflix co-founder and former Redbox president Mitch Lowe. The company aims to make it easier for movie-lovers to see films in theaters by offering a low-priced monthly subscription service. Helios & Matheson, a New York-based data and analytics company, acquired MoviePass in 2017. In the same year, Helios & Matheson reported a loss of $150.8 million.
Last Wednesday, the company enacted a 1-for-250 reverse stock split in an attempt to increase share price above the Nasdaq’s $1 minimum requirement. If the stock closes below $1.00, a Nasdaq delisting warning will be submitted.
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