This latest plummet comes after the company disclosed in a regulatory filing on Tuesday (May 8) that it has been losing an average of $21.7 million in cash on a monthly basis between September and April. Shares in Helios and Matheson fell by almost 30 percent as a result.
Since last Thursday, the stock has moved from $2.13 to $0.79, a drop of 63 percent. The company’s market cap is now $51.44 million.
“Our burn rate has been slashed 35 to 40 percent by the implementations and abuse prevention measures we have put in place over the last few weeks. We have always known, from when MoviePass took off in August, that it was going to be a high cash burn business model,” said MoviePass CEO Mitch Lowe in a written statement, according to TechCrunch. “We are not changing our guidance on five million subscribers by the end of this year – which should make us profitable/cash flow positive according to our business model. We have access in capital markets to over $300 million. So there is plenty of cash available to sustain the subscriber growth and movie-going habits of our users.”
In the regulatory filing, the company stated that it believes it can decrease its cash loss on the service by 35 percent over the first week in May. The savings would be the result of product changes, such as verifying that movie tickets were used by subscribers and not by other individuals.
One change that might help is the revelation that MoviePass, which briefly removed its movie-a-day monthly subscription from its website, will start allowing customers to sign up for it again. Variety, citing Lowe, reported that the company never intended to give up on its popular plan, in which customers can access a movie-a-day monthly subscription package.
“We never planned to abandon the flagship product that everybody loves,” Lowe told Variety.