MoviePass/Reuters MoviePass CEO Mitch Lowe and Helios and Matheson Chief Executive Ted Farnsworth
- MoviePass' parent company, Helios & Matheson, is doing a massive reverse stock split that will give investors one share for every 250 they currently own.
- The stock has declined dramatically from a high of nearly $40 to just $0.09 this week.
- Follow HMNY's stock price in real-time here.
Helios & Matheson, the parent company of MoviePass, announced a massive 1-for-250 reverse stock split on Tuesday - just one day after receiving permission from its shareholders for the move designed to keep it from being delisted by the Nasdaq stock exchange.
At a specially-convened shareholder meeting on Monday, investors approved two measures designed to help the company avoid being kicked out of the stock exchange, something the Nasdaq warned would be possible, if the embattled company did not get its share price above $1 and its market value above $50 million.
Shareholders will receive one share for every 250 they currently hold. At Tuesday's prices, one share originally worth $0.09 would be worth $22.50.
"We believe this is an important step that will facilitate our access to capital over the next several years and enable us to implement our growth plans for MoviePass, MoviePass Films and MoviePass Ventures, and will enable us to pursue potential acquisitions to grow our business," Ted Farnsworth, HMNY's chief executive, said in a press release. "With greater access to capital, we expect to solidify our position as the Number 1 movie theater subscription service in the U.S. and continue to revolutionize the movie industry."
At the meeting on Tuesday, in the company's office at New York's Empire State Building, Farnsworth laid out his plan to turn MoviePass' enthusiastic subscriber base into an army in its war against traditional movie theaters, citing market research showing its customers would choose a theatre chain based on guidance from the company.
Shareholders also approved an increase in the company's outstanding common stock from 500 million to 5 billion at the meeting.
HMNY's stock price is down 99% from its October high of more than $38. That was hit shortly after the company acquiring a 92% stake in the MoviePass subscription service.