We’re pretty surprised that it took this long.
MoviePass announced on Friday it’s shutting down the discount ticketing service on Sept. 14. Shares of MoviePass parent company Helios and Matheson Analytics dropped 10% Friday afternoon, though the stock trades for a fraction of a penny.
MoviePass notified subscribers that it plans to close down the service because its “efforts to recapitalize MoviePass have not been successful to date.” It has formed a strategic review committee, made up of the company’s independent directors, to explore “strategic and financial alternatives” for the company.
Among the options it’s considering are a sale of the company in its entirety, a sale of the company’s assets, including MoviePass, Moviefone and MoviePass Films, as well as the possibility of a reorganization of the company. Helios and Matheson Analytics noted that any transaction would include the “assumption or settlement” of any of its liabilities.
Prior to the service’s closure, MoviePass had been struggling for more than a year. Last March, MoviePass launched a revamped version of its unlimited plan, which let users watch one movie per day for $9.95 per month, as part of an eleventh-hour attempt to revive the subscription service. However, the service saw its subscriber base plummetfrom more than 3 million members to about 225,000 as of April 2019.
Additionally, MoviePass last month laid off at least seven of its employees, bringing the total staff down to about 12 people, according to Business Insider. That’s after the company was forced to add restrictions to the app in an effort to slow its cash burn, including limiting users to four movies per month, instead of being able to watch one movie per day. Helios and Matheson also took out sizable loans to cover its ballooning losses.
Last October, then-New York Attorney General Barbara Underwood opened a probe into Helios and Matheson’s business dealings, alleging the company misled investors regarding its financials.