August 10, 2018
A company’s future as a publicly traded stock is undeniably bleak when Wall Street values it less than $100,000.
That’s the reality Helios and Matheson Analytics, parent of MoviePass, found itself Aug. 10 when shares fell to 5.5 cents per share in midday trading, leaving HMNY with a market valuation of just $96, 200.
By comparison, AMC Theatres and Cinemark Theatres, which each have competing ticket subscription services, have $2.2 billion and $4.3 billion market caps, respectively.
The book has pretty much been written on MoviePass, a populist business model that enables subscribers to see a theatrical screening daily (now three times monthly) for $9.95 fee.
Indeed, 3 million people signed up to the service essentially to watch movies for free, leaving MoviePass to pay the bill. The company thought its scale and self-proclaimed user data would convince exhibitors to become partners and split costs.
Exhibitors had different ideas. Such as enjoying the MoviePass fiscal windfall, high-margin concession revenue for themselves, and then building a more economically prudent subscription service.
That might sound unfair and exploitive. But that’s capitalism. A reality HMNY should have known.