MoviePass’ stock has been under severe pressure recently as investors worry about a cash crunch at the company. But Ted Farnsworth, head of Helios & Matheson Analytics, the parent company of MoviePass, 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. While Wall Street and investors are growing skeptical about the service that gives users free visits to the movies for a monthly subscription, Farnsworth is undeterred. “We’ve got 17 months’ worth of cash without further raises of capital,” the executive told Variety. One of its most popular subscriptions, its “see a movie for a day for $9.95 a month,” loses money because it pays theaters full price for the tickets — but in some cities, it costs $15 for a ticket. MoviePass is betting that users will see around two movies a month over time, thus making it money. AMC Theaters Chief Adam Aron said MoviePass users were going to movie theaters multiple times a month and said he was skeptical that customers of the service will reduce attendance to the levels MoviePass needs to stay profitable.
Farnsworth took issue with those comments. “They’re trying to put us out of business,” he said “We’ve become a serious threat.” The executive also noted the company was completing a big buy that it will announce at the Cannes Film Festival in the coming days. “It’s going to be substantial. People are going to go, ‘Hmm how did they pull it off?’”