MoviePass Owner Plans 1-for-250 Reverse Stock Split, ‘Rotten Tomatoes’-Like Rating System, Among Other Bravado

Early in the United States’ ill-advised war on Iraq, Mohammed Saeed al-Sahhaf, former Iraqi information minister (a.k.a. “Baghdad Bob” or “Comical Ali”), was known for his propaganda and colorful speech intended to boost the morale of Iraqi troops.

Fifteen years later at Media & Entertainment Service Alliances’ Smart Content Summit in New York, Ted Farnsworth, CEO of Helios and Matheson Analytics, parent of theatrical ticket service MoviePass, is doing his best “Baghdad Bob” schtick.

During the July 24 self-serving keynote, “Disruption in the Entertainment Industry – Monetizing the MoviePass Effect,” Farnsworth said the fiscally-challenged ticket subscription remains on course to turn the exhibitor market on its ear.

“It all comes down to data,” Farnsworth said, as reported by M&E Daily. “We know our subscribers. We know what they like. We know what movies they go to — their genre, all these different things. Nobody else knows that.”

Data, in addition to tickets and content ownership/licensing, is high on MoviePass’ portfolio of assets Farnsworth believes makes the service unique and worthy of Wall Street investment.

The service will soon launch a movie rating system powered by MoviePass subscribers because apparently current Rotten Tomatoes, Metacritic and Fandango rating systems aren’t enough.

Farnsworth contends movie studios have no clue who watches their movies.

“Boggles my mind,” he said, adding that monetizing the data remains “a challenge”.

That’s putting it mildly.

Helios and Matheson Analytics remains challenged just staying in business. It claims MoviePass has more than 3 million subscribers and is on course to reach 5 million subs by the end of the year.

No doubt, offering subs daily access to a theatrical screening for $9.95 monthly fee is a boon for consumers. It almost sounds too good to be true. That’s because it is. It’s loss-leader pricing on crack.

HMNY has been hemorrhaging cash, burning through more than $20 million monthly paying exhibitors face value for each ticket used by subscribers. The company warned it faced liquidity issues in its most-recent fiscal period.

Investors noticed, sending HMNY shares freefalling to less 10 cents per share – unsustainable by anyone’s yardstick.

Thus, HMNY said it plans a 1-for-250 shares reverse stock split to take effect July 25. The news resulted in more than 60 million shares trading hands as investors headed for the exit.

“We believe this is an important step that will facilitate our access to capital over the next several years and enable us to implement our growth plans for MoviePass, MoviePass Films and MoviePass Ventures, and will enable us to pursue potential acquisitions to grow our business,” Farnsworth said in a statement. “With greater access to capital, we expect to solidify our position as the No. 1 movie theater subscription service in the U.S. and continue to revolutionize the movie industry.”

With the stock currently trading at a vacuous 0.08 cents per share, after the split, HMNY shares will “worth” $20 per share.

Said one online observer, “They just couldn’t wait to screw the stockholders.”