Merchant Innovation

MoviePass Parent To Sell Up To $1.2B In Equity, Debt To Fund Growth

Helios and Matheson Analytics, the parent company of movie ticket subscription service MoviePass, announced on Monday (July 2) that it will sell up to $1.2 billion of equity and debt securities over the course of three years.

In a press release, Helios and Matheson announced it has filed a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission. The shelf registration will give the company the flexibility to finance growth, including for MoviePass, MoviePass Ventures, MoviePass Films and Moviefone.

In June, Helios and Matheson Analytics announced it was issuing $164 million in bonds and 20,500 shares of preferred stock. In a press release at the time, the MoviePass parent company said the net proceeds from the offering and preferred stock would be used for general corporate purposes. The company said the notes would be convertible at a conversion price of $1, subject to adjustment. The preferred stock would not be convertible into common stock. Each share of preferred stock was entitled to 3,205 votes per share.

The move on the part of Helios and Matheson comes as MoviePass’ stock has been under severe pressure recently as investors worry about a cash crunch at the company. Ted Farnsworth, head of Helios and Matheson, said the subscription service has enough cash to survive and thrive. In an interview with Variety, Farnsworth said MoviePass has around $300 million in an equity line of credit.

“There’s been a feeding frenzy of negativity, but it’s not going to slow us down,” said Farnsworth in the interview. “I’m not worried at all. You’re going to see. We’re doing more acquisitions of movies and companies.”

Citing public filings, Variety reported that MoviePass said it has $15.5 million in cash, which is lower than what it spends typically each month to fund ticket buying. Though Wall Street and investors are growing skeptical about the service that gives users free visits to the movies for a monthly subscription fee, Farnsworth is undeterred.

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