![]() When I saw the news, the first thing that came to mind was "Hmm, why would a company that's seeing such success need such a massive injection of funding? That's when I started to dive into the story, and what I found was concerning. In the announcement the company said that the $100 million raised would be used for the purpose of further funding of MoviePass as well as for general corporate purposes. For Helios and Matheson on the other hand, it wasn't normal business, the need for the funds was to pay for what investors perceived to be a smashing success. After all, many companies look to the market for funds, and while this can cause dilution-based declines, it's a perfectly normal part of business. Looking for funds wasn't the big issue though. Under the agreement, the company would issue $100 million in convertible notes. ![]() On the 6th of November, Helios and Matheson announced that it entered into a securities purchase agreement with institutional investors. The issues became clear when the company issued a press release on November 6, 2017, when it reached out to institutional investors for a massive injection of funding. ![]() MoviePass Becomes A Victim Of Its Own SuccessĪs MoviePass subscribers continued to poor in, it quickly became clear that MoviePass would become a victim of its own success and that it would drag its parent company, Helios and Matheson Analytics down with it. In fact, the stock climbed to record highs of $32.90 on October 11th, 2017. This growth in subscribers clearly hit the nail on the head for investors investors. OctoOn October 24th, the company announced that MoviePass had surpassed 600,000 subscribers and guided for growth to 3.1 million subscribers by August of 2018. SeptemOn September 14th, just 30 days after the company purchased the majority stake in MoviePass, the company announced that the service had grown to more than 400,000 paying subscribers from less than 20,000 on August 14th. Shortly after the announcement surrounding the Helios and Matheson acquisition of a majority stake in the company, we started to see press release after press release surrounding the subscription service's incredible growth: Surprisingly, the price for the service was set at just $9.95 per month. Along with the announcement, the company said that it would launch a new service, giving subscribers unlimited access to the movie theater with no blackout dates and no contracts. The Helios and Matheson acquisition of the majority stake would change that on the date of the acquisition as well. The service caught the attention of the masses in the investing world as it was led by Mitch Lowe, a mogul best known as a co-founder of Netflix ( NFLX) and president of Redbox, a subsidiary of Apollo Global Management ( APO).Īvailable in 91% of movie theaters in the United States at the time, MoviePass came with a fee of nearly $50 per month. On August 15, 2017, a press release was launched, announcing that Helios and Matheson had entered into a definitive agreement to acquire a majority stake of MoviePass, a company that offered a movie theater subscription service. Then, the company acquired a majority stake in MoviePass. It's only real product was Red Zone Maps, an app that helped to map high crime areas. The Acquisition That Put Helios And Matheson Analytics On The Mapīefore August 15, 2017, Helios and Matheson was a relatively hidden company. In my view, these declines are going to continue. While the acquisition and resulting growth in subscribers led to a dramatic rise to the top, we've seen a fall that has been just as dramatic since record highs were reached in mid-October. The company found itself to the mainstream in August of 2017 after acquiring a majority stake in MoviePass. Helios and Matheson Analytics ( OTC:HMNY) started as a data analytics company.
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