Shares in MoviePass parent Helios & Matheson began trading over the counter today after the beleaguered company was delisted by the Nasdaq.
The ouster from the major stock market comes after several warnings relayed in SEC filings in recent months, given that companies cannot have their shares trade below $1 for extended periods. Helios stock has been worth less than two cents a share since a failed attempt to goose its value last summer via a reverse-split.
In a filing, the company said a Nasdaq review panel disclosed its decision on Monday. “The company does not intend to appeal the determination of the panel at this time,” the filing said. Shares will continue to trade in the OTC Markets system under the current ticker symbol, HMNY. Stocks traded over the counter are generally more restricted than those on larger exchanges like the Nasdaq or the New York Stock Exchange.
Officials have signaled they still intend to spin off the MoviePass business into its own separate unit, a move announced in January. In another “business-as-usual” indication, on its final day of trading on the Nasdaq, the company issued not one but two press releases from production arm MoviePass Films. One noted the start of shooting of Axis Sally, a World War II drama starring Al Pacino. The other offered a reminder of Neon co-production Border‘s Oscar nomination for Best Makeup and Hairstyling.
Helios, a data analytics firm, bought a majority stake in MoviePass in August 2017, and its shares soon took off on the promise that the subscription movie ticketing company had the chance to be the Uber of exhibition. It rapidly grew to more than 3 million subscribers by offering those paying $10 a month the chance to see one movie a day.
Because it had to buy tickets in bulk quantities in order to fulfill members’ orders, even during heavy-demand summer blockbuster season, the losses quickly mounted and the company had several outages. Customers were put off by the company’s reports that the unavailability of popular films like Mission: Impossible – Fallout was due to technical issues, when financial woes were the main culprit. The company has since rejiggered its subscription plans with tiered pricing and more limitations on basic plans.
The New York State Attorney General’s Office opened an investigation of the company last year after investors complained. Major exhibitors AMC and Cinemark launched their own subscription plans, which quickly gained traction and put yet more pressure on MoviePass.
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