Is This the End in the Never-Ending Story of MoviePass?

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Shares of Helios and Matheson Analytics Inc. (NASDAQ: HMNY) have plunged from a high of around $1,800 (adjusted for secondary offerings and splits) to around 2 cents. That’s as close as a company can come to having a zero value as might be possible.

The stock actually traded as high as $0.023 early Thursday after closing at $0.193 on Wednesday. That’s a boost of 19%. All the stock needs to do now is repeat that kind of performance every day for years and shareholders will be made whole again.

Such a scenario is unlikely. Company director Carl Schramm resigned Saturday in a filing just made public. In his resignation letter, Schramm said that his ability to “effectively discharge” his duties as a director “has been compromised beyond repair”:

[O]ver the past eight weeks … management apparently has made a number of important corporate decisions and executed significant transactions either without Board knowledge or approval, or in Board meetings initiated with only a few hours of advance notice by email (at least one of which I did not even know had been called until the meeting had concluded). Just last week, I learned that management withheld material information from the Board for several months.

The company said in its filing that it “firmly believes that it has kept the board fully informed and has provided all information needed for board members to exercise their responsibilities.”

Regardless of who is right, MoviePass continues to struggle to come up with an offer that consumers will accept while at the same time stop the cash flooding out of the company’s bank account. MoviePass’ initial offer was primarily promotional: subscribers could go to a movie theater every day for a month for just a $9.95 monthly fee. A single movie ticket costs an average of nearly $9, and MoviePass had to pay the theater the full price for every ticket a subscriber purchased.

The company has changed the offer several times since then, but nothing has helped stop the bleeding. Losing money on every subscription a company sells is not a viable business model. Why anyone ever thought it would be remains a mystery.

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