It’s been three months since MoviePass went viral by dropping the price of its unlimited cinema subscription service to $9.95 a month. To celebrate, the company lowered its subscription price (for a limited time) to $6.95 a monthfor customers who sign up for their annual plan.
For the record, I believe this was a savvy smart move on the part of management. The offer will 1) lock customers in for a year, 2) bring in millions of upfront dollars, allowing them to minimize dilution and delay utilization of the $100M Helios recently raised, 3) accelerate subscriber growth, and 4) auto-renew customers at $9.95 once the annual plan expires.
In September, I interviewed Ted Farnsworth, CEO of Helios and Matheson (HMNY). Just before MoviePass made its fateful move to $9.95, Helios secured an agreement to take a controlling stake in MoviePass. Since then, shares of Helios have been on a rollercoaster ride, soaring from a low of $2.42 to a high of $38.86 in less than one month. The shares then pulled back to $8.85 on profit taking and short selling.
The short selling, in particular, was (and remains) aggressive. According to shortsqueeze.com, short interest in HMNY still represents 86% of its float. Similarly, data at NakedShortReport.com shows that short volume has represented 55% of the past month’s total. The shorting has gotten so intense that HMNY was added to the ultra-exclusive Reg SHO Threshold List, which is meant to protect against the illegal naked short selling.
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MoviePass, and its presumptive majority-shareholder Helios & Matheson (HMNY), have been making their case to be remembered as the tech story of 2017.
MoviePass has upped the ante by lowering the price of its unlimited cinema subscription service to $6.95 per month for annual subscribers.
Meanwhile, investors are still debating whether the company can achieve profitability at a $9.95 price point. Is management, with millions at personal stake, just crazy, or crazy like a fox?
Helios has emerged from nowhere to become one of the most hotly-contested battleground stocks in the sector. This article reviews the MoviePass strategy for consideration by bulls and bears alike.