MoviePass to be jettisoned by parent company

Lawrence Kim
October 24, 2018

On Tuesday the company announced a preliminary plan to spin off MoviePass as a separate entity. For one thing, HMNY said that it's not sure such a transaction is allowed under DE law.

Helios and Matheson - which has seen its stock plunge to practically nil since it took control of the money-losing app last August - said it's spinning off MoviePass to improve the "market perception" of its own company, which trades under the ticker symbol HMNY.

When the attorney general starts looking at your business to determine whether your company misled investors, it might be slightly suspicious to dump the main offending subsidiary off on its lonesome.

Some of that may simply help distract from the fact that MoviePass was burning money so fast that it actually ran out and suffered a service interruption, or that it has a possessive grip on subscriber's membership statuses. MoviePass then borrowed $5 million in cash.

"We believe this new vertically integrated entertainment ecosystem, if achieved, would provide a sharper market focus", Ted Farnsworth, Helios and Matheson Analytics chairman and CEO, said in a statement.

It recently changed MoviePass to a three-movie-per-month service, compared with its original movie-a-day offering.

Helios & Matheson said that "if permitted to do so under applicable DE law", it plans to distribute a minority of the outstanding shares of MoviePass Entertainment common stock as a dividend to stockholders of HMNY as of a record date that is yet to be determined, with HMNY retaining control of MoviePass Entertainment.

Helios plans to distribute Movie Pass Entertainment common shares to Helios and Matheson stockholders. MoviePass will be listed on Nasdaq or an alternate trading market if the branch can satisfy the applicable initial listing criteria of the applicable exchange or trading market, Helios & Matheson Analytics added.

Following the MoviePass Entertainment spinoff, HMNY plans to retain its ownership of Zone Technologies and would discontinue its previously announced plan to spin off Zone.

After ridding itself of the financial trash fire of MoviePass, HMNY will focus on "data analytics and consumer centric technologies", a release stated.

Other reports by Click Lancashire

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