Investing

Who Will Get MoviePass Assets If It Goes Out Of Business?

Douglas A. McIntyre

Published: July 4, 2018 6:50 am

Last Updated: January 11, 2020 9:30 pm

Things at movie ticket sales agent MoviePass has been sick, financially, and based on a new SEC filing will probably get worse, if that is possible. Despite some success it has had getting subscribers, it may run out of money soon. That leaves open who the possible buyers of its assets might be.

Parent Helios and Matheson Analytics (NASDAQ: HMNY) recently filed to raise over $1 billion. The company reported:

Helios and Matheson Analytics Inc. announced that it has filed a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission (the “SEC”). Under the shelf registration statement, once the SEC declares it effective, HMNY may offer and sell, from time to time, up to $1.2 billion of a variety of its equity and debt securities over a period of three years.

Under the shelf registration statement, HMNY will have the flexibility to publicly offer and sell from time to time common stock, preferred stock, debt securities, warrants, subscription rights, units or any combination of such securities. HMNY may periodically offer one or more of these securities in amounts, at prices and on terms announced, if and when the securities are ever offered. The specific terms of any potential future offerings, along with the intended use of proceeds of any such securities offered by HMNY, will be described in a prospectus supplement at the time of any such offering.

MoviePass has over 3 million subscribers, but its marketing and operation costs have been huge. HMNY shares have dropped 97% to $.21 this year, a clear sign that the market doubts whether the company is viable.

Theater giant AMC might want the MoviePass subscriber base, although it could involve selling tickets for competitive chains  Its new Stubs A-List allows people to watch three movies a month in AMC theaters for $19.95. When it was launched, it dealt another blow to MoviePass’s prospects. Fandango, which is an online ticket seller has also launched its own service. It could be a buyer of the MoviePass subscriber base, and brand, as well. There are several other nice movie ticket sales membership companies. AMC and Fandango are probably the most likely buyers because of their size and brands. And the assets would be sold cheaply if there bankruptcy.