Bay Area News Group reports:
Is the end near for MoviePass, the popular subscription movie-going service with more than 3 million subscribers? MoviePass experienced “technical difficulties” that prevented many subscribers from using the service Thursday, with its Twitter account saying it was related to its “card-based check-in process.”
But the real reason for the technical difficulties? MoviePass ran out of money to buy tickets, according to an SEC filing its parent company made on Friday.
The parent company, Helios and Matheson, then borrowed $6.2 million — $5 million of which was cash — from Hudson Bay Capital Management in order to restore its service. The $5 million cash was used to “pay the company’s merchant and fulfillment processors,” the SEC filing said — in other words, to buy the movie tickets subscribers order on the app.
Earlier this week, Helios and Matheson implemented a 1-for-250 reverse stock split, which analysts saw as a way to bolster its stock price. It a stock trades below $1 for 30 consecutive days, it is in danger of being delisted, according to Nasdaq rules. The split boosted the stock price to $21.25 from 8.5 cents, but the price fell to $3.50 just days later.
We are very sorry to users having issues checking-in this evening. Some users have reported issues with card-based check-ins and we are working towards a fix on this technical issue. In the meantime, all e-ticketing remains fully functional.
— MoviePass (@MoviePass) July 29, 2018