MoviePass Continues Downward Spiral: Parent Company Posts $126M Loss, Shareholders Sue, And That’s Not All
Today in MoviePass news: a whole mess of bad stuff. To wit, the ailing movie subscription service is currently dealing with a multitude of new issues, beyond attempting to roll out yet another change to its plans, the consistent social media chatter from unhappy customers, and the recent revelation that even when said customers were canceling their accounts, oops!, the company wasn’t exactly following through with their wishes. The latest batch of problems to befall the company: a parent company with a massive operating loss, a bunch of angry shareholders, and one partner offering refunds on a failing service.
Deadline reports that MoviePass’ parent company Helios and Matheson (HMNY) “reported an operating loss of $126.6 million for the most recent quarter ending June 30. This follows a July of woes including their stock plummeting (again) under $1 after a 250-to-1 reverse stock split, and the service stalling on numerous occasions including the Thursday night before ‘Mission: Impossible – Fallout’ opened when it looked like MoviePass ran out of money, and needed to take a $6M-plus loan.”
That’s bad enough, but that news comes with an additional pickle, thanks to the filing of a class action lawsuit that was recently “made public as shareholders seek compensation after losing a significant amount of money. … The suit was filed against Helios and Matheson, CEO Ted Farnsworth and CFO Stuart Benson.” Deadline reports that “shareholder Jeffrey Braxton filed suit Monday in federal district court in New York on behalf of hundreds, or potentially thousands, of investors who suffered losses because they were misled about the company’s business and its prospects.”
The suit maintains that MoviePass’ “business model was unsustainable and that it was inevitable that the parent company Helios would ‘run out of cash’ or lose so much money as to raise questions about whether it could remain a viable business.” (Per Deadline, you can read the full suit here.)
Beyond the massive loss of money and the angry shareholders, Exstreamist reports that Costco is now accepting returns on one-year prepaid subscriptions that the big box retailer sold on behalf of the service. Writer Rob Toledo — himself an unhappy customer — writes of his experience asking for a return on his subscription after yet another weekend in which he was unable to book a single ticket through MoviePass.
Read More:MoviePass Makes Its Most Drastic Change: Subscribers Can Only See Three Movies a Month
Toledo writes, “I checked with Costco support to see if they’d accept a return of the one-year prepaid subscription, and they said yes, they would be accepting returns of the service. I asked for some more details on the specifics of the return, and the representative simply stated that the MoviePass subscription fell within their standard return policy, and would be honored in this case. Basically, if I had bought a vacuum cleaner, and it broke in the first year, Costco would happily accept a return. Similarly with MoviePass, the service broke, and Costco is willing to make it right.”
You really can return anything at Costco.
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MoviePass Makes Its Most Drastic Change: Subscribers Can Only See Three Movies a Month
