Things are not looking good for money-losing MoviePass parent Helios and Matheson Analytics (NASDAQOTH:HMNY). On Monday, the stock crashed to its lowest share price ever, falling 26% on the day to close at just $0.11 per share.
Perhaps even more disconcerting, no one knows why.
It's been nearly a week since Helios issued its ultra-vague announcement about an upcoming issuance of new shares, plus warrants to buy even more shares. Five days have passed, but management hasn't revealed any details regarding how many shares it plans to sell, how much money it might get per share, or when (or if) the share offering will even happen.
About the only "news" there's been in the intervening time is that Helios' CEO Ted Farnsworth did an interview with TheStreet.com in which he apparently promised to make his company profitable within the next six months, and grow his subscriber base to five million customers.
With MoviePass still selling monthly memberships for a mere $9.95, movie theaters still selling tickets for an average of $9.16 per flick, and MoviePass still paying full freight on as many as 30 tickets per month for each of its subscribers, it's hard to see how adding more subscribers will do anything other than lose more money for MoviePass, faster.
Businesses have been promising to sell things at a loss then "make it up on volume" for about as long as there have been businesses -- but the economics rarely work. MoviePass shareholders may have finally twigged to the fact that it's not going to work out for MoviePass, either.