Helios increases stake in MoviePass to 92%.
From February 27, 2018 through April 13, 2018, Helios provided cash advances to MoviePass to support MoviePass’ working capital and operational requirements, as well as to support the expansion of MoviePass’ business plans and objectives. The total amount advanced by Helios to MoviePass during this period totaled $35,000,000 (the “Advance”).
Analysis: Helios and Matheson Analytics (HMNY) now owns 92% of moviepass.com, the leading provider of $9.99 a month/ 4 movies a month subscriptions. They reached 92% from 81% ownership by forgiving 53$ million dollars of debt from moviepass.com
In 2 months from February 27 2018 to April 13 2018 (~46 days) Moviepass.com has borrowed $35 million dollars to support the operation of $9.99 monthly subscriptions. 2-3 million subscribers total. The agreed valuation is $300 million for moviepass.com, although valuation is highly adjustable due to the money losing Cost of Goods ($8.95 per ticket * 4 tickets = $32) moviepass.com must pay for each ticket viewed.
It looks like Helios forced the ownership change to 91% due to the constant bleeding and borrowing of cash at a tune of $750,000 a day. Helios has also recently diluted public shares of HMNY selling them around $2.75 USD per share of HMNY. HMNY has a $100 million market cap. Without heavy cash infusion of outside capital, It is unlikely further dilution of shares is possible.
Conclusion: Wait for the heavy cash infusion $500m+ above for any type of long investing in this company. At $30 million cash run rate and no new revenue sources in sight, this company needs cash in the bank to survive.