MoviePass walks back its claim to be 'profitable' and declines to say which investors 'did well' during its 99.99% stock drop
- MoviePass has walked back claims by its parent company's CEO, Ted Farnsworth, that the movie-ticket subscription service is "profitable."
- MoviePass said it would be more accurate to say that it made more in revenue from the "typical subscriber" - one who had the median usage - than it paid to movie theaters.
- MoviePass declined to comment on Farnsworth's statement that investors in the company had "done well."
- The stock of MoviePass' parent company, Helios and Matheson Analytics (HMNY), is down over 99.99% from its peak in late 2017.
MoviePass has walked back its claim to be "profitable."
In an interview with Techcrunch published on Thursday, Ted Farnsworth, the CEO of MoviePass' parent company, Helios and Matheson Analytics, said the company's movie-ticket service was "profitable right now."When asked for clarification from Business Insider, MoviePass said it would be more accurate to say that, before the launch of its new "Uncapped" plan, MoviePass was making more in revenue from a subscriber with the median usage - which the company called a "typical subscriber" - than it paid to movie theaters for that typical subscriber. MoviePass did not claim that its total subscriber revenue exceeded the total amount it paid in movie tickets.
Helios and Matheson recently amended its latest quarterly report, for the three months ending September 30, to show a net loss of $138.6 million. MoviePass is the company's main business. No subsequent reports had been filed as of Friday morning.
In the Techcrunch interview, Farnsworth also said when discussing the evolution of MoviePass that Helios and Matheson's "investors did well investing along the way."
Helios and Matheson's stock has fallen over 99.99% from its peak in late 2017 (it took a controlling stake in MoviePass in August of that year) and is now trading at around $0.01 per share (following a 1-for-250 reverse stock split). It was delisted from the Nasdaq in February for failing to meet listing standards and is now trading over the counter.
Business Insider has spoken to many investors who had seen their Helios and Matheson stakes dwindle by over 99% in value, as the company flooded the market with new shares and sustained hundreds of millions in losses. One retiree investor told Business Insider in August that he'd lost almost $190,000 on the stock.
When asked which investors Farnsworth was referring to who "did well" with Helios and Matheson, the company declined to comment.