Post Reverse-Stock Split, MoviePass Parent Shares Plummet 50%

Helios and Matheson Analytics tried to pull a magic trick at the market close July 24, transforming company shares – worth 8.5 cents – into $21.25-per-share valuation following a 1-for-250 shares reverse stock split.

After-market naysayers sent shares of the MoviePass’ parent tumbling further to open July 25 at $14.23 per share.

The stock plummeted another 50% to close July 25 at $10.60 as badgered investors turn their back on HMNY’s last-ditch effort to resuscitate a business model that essentially enables subscribers to go to the movies – for free – 30 days out 31 days each month (with 31 days).

The other “day,” subscribers pay $9.95.

HMNY was forced into the reverse stock split to gets its moribund stock above the Nasdaq minimum $1 valuation for 10 straight business days to avoid being delisted.

“You do the reverse split and get over $1, but I don’t think that will attract [investors],” Erik Gordon, assistant professor University of Michigan’s Ross School of Business, told Business Insider. “I mean, theoretically there could be somebody stupid enough to go, ‘Wow, it went from $0.09 to [$14].’”

Gordon believes HMNY’s biggest challenge remains convincing investors to continue throwing money at a stock that lost 97% of its value before the split. Convincing subscribers is easy. The service expects to have 5 million members by the end of the year to break even.

Ted Farnsworth, HNMY’s ever-optimistic CEO, told Business Insider MoviePass is resilient.

“Wall Street understands how we operate,” he said. “They love the story. They think we’re the next unicorn company.”

Netflix Worth More Than Comcast, Disney on Wall Street

Thanks to a record stock price, subscription streaming video behemoth Netflix quietly ended May 23 with a market value exceeding Comcast for the first time.

The same Comcast that owns NBC Universal, DreamWorks Animation and wants to own 20th Century Fox Film and British satellite TV operator Sky.

Netflix ended the day with market capitalization of $149 billion, which bested Comcast’s $147 billion market cap. Netflix opened May 24 up to $151.8 billion, which passed Disney’s $151.7 billion market cap.

With more than 125 million subscribers globally, Netflix continues to grow. The service expects to add 6.2 million subs in the second quarter ending June 30.

The service also continues to expand its creative product with the bow of “Dear White People,” “The Break with Michelle Wolf” on May 27, and announcement of future projects with former President Barack Obama and First Lady Michelle Obama.

The latter drew some pushback on social media, with several subscribers saying on Twitter they would cancel their service, according to Fortune.

Apparently, President Obama’s desire to “cultivate and curate the talented, inspiring, creative voices who are able to promote greater empathy and understanding between peoples and help them share their stories with the entire world,” being an affront to some.

Chief content officer Ted Sarandos said the Obamas are “uniquely positioned to discover and highlight stories of people who make a difference in their communities and strive to change the world for the better.”

And Wall Street agrees — for now.

MoviePass Parent Finds Third-Party Stock Seller

Cash-strapped Helios and Matheson Analytics (HMNY), which owns 92% of theatrical ticket subscription service MoviePass, has hired a third-party company to sell upwards of $150 million in company stock.

HMNY entered into an “At-the-Market” equity offering sales agreement with Canaccord Genuity LLC, under which HMNY may, from time to time, offer and sell shares of its common stock.

ATM agreements are sometimes used by publicly traded companies to raise capital in secondary trading markets, with Canaccord receiving a commission on each transaction. The agreement affords Helios and Matheson the ability to raise capital on terms they choose, in addition to taking advantage of any rise in share price.

The company said it would use the funds for a variety of purposes, including possibly increasing its stake in MoviePass, supporting operations of MoviePass and MoviePass Ventures, paying amounts in connection with previously-issued convertible notes, general corporate purposes or acquisitions.

The pact with Canaccord comes the day after an independent auditor for Helios and Matheson – in a regulatory filing – warned about the company’s ability to continue operating as a “going concern.”

HMNY disclosed it lost $150.8 million in 2017 on revenue of $10.4 million operating MoviePass, which affords subscribers access to daily theatrical screenings for $9.95 per month. MoviePass pays exhibitors full value for every ticket used by subscribers.

Netflix Stock Tops Record $300 Per Share

March 2 was a good day for Netflix shareholders. The SVOD pioneer’s stock reached an all-time high of $301.62 per share – after teasing the benchmark earlier in the week.

The 3.7% stock gain on the day resulted in $130.6 billion market capitalization – up 50% from $87.01 billion on Jan. 2.

Market capitalization is based on share price and number of shares outstanding. It generally represents the market’s view of a company’s stock value and is a determining factor in stock valuation.

In other words, Netflix is on fire. It is outspending all other media and streaming companies on original content, including feature-length movies.

Pay-TV operators that once shunned Netflix, believing TV Everywhere could neutralize the SVOD threat, now embrace the behemoth offering their subscribers direct access.

Indeed, Britain’s satellite operator Sky went one step further this week: offering Netflix as a quasi-channel, including side-by-side content selections.