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MoviePass Parent Files To Raise $1.2 Billion To Stay Afloat (variety.com)

Posted by BeauHD on from the rough-waters dept.

An anonymous reader quotes a report from Variety: Helios and Matheson Analytics, the struggling parent company of MoviePass, filed a registration statement with the SEC to raise up to $1.2 billion in equity and debt securities over the next three years. The funding is intended to support the cash-burning operations of MoviePass, as well as the MoviePass Ventures movie investment subsidiary, MoviePass Films and Moviefone, which Helios and Matheson recently acquired from Verizon's Oath.

Of course, whether Helios and Matheson can actually persuade investors to keep pouring money into the venture is unknown. The announcement comes after Helios and Matheson, the New York-based data and analytics company that bought MoviePass in 2017, last month announced a $164 million bond sale to provide working capital for MoviePass.

35 comments

  1. Investors? by DogDude · · Score: 5, Insightful

    What the hell are these investors investing in? This is a company that sells $10 bills for $5. This is one of the stupidest business models I think I've ever seen (and I'm kinda' old).

    --
    I don't respond to AC's.
    1. Re:Investors? by Presence+Eternal · · Score: 1

      You gotta help me. I thought I was investing in Groupon.

    2. Re:Investors? by Anonymous Coward · · Score: 0

      Burn ALL the cash!

      Seriously, though. Mark my words: there's some grade A level accounting fuckery going on here, and at least one of their C*O's going to end up in jail.

    3. Re:Investors? by Riceballsan · · Score: 1

      I think they are trying to be like american health care... except for on a service that people barely want and nobody needs that is likely going to be dying on it's own in a few years.

      In short their business plan is more or less. First spare no expense, do whatever it takes to become the means people use to go to movies. Get positioned to the point where if a cinema were to say "no we don't take movie pass here", means turning away half or more of their customers. Then use that new leverage to tell the theatres that they need a 75% discount for all of the customers they are bringing in. The theaters can accomplish this and keep their existing profit margins by raising their prices for non movie-pass customers (If they do this moviepass will just raise their fee, but it will be a bigger "savings" because of the new jacked up prices the theaters charge).

      I do agree though it's still a stupid ripoff, while they are working to secure theatre rights, less people can really afford to go to the theatres, and more are waiting to see things on netflix etc... to save themselves from leaving their houses and paying ridiculous prices to begin with.

    4. Re:Investors? by Anonymous Coward · · Score: 0

      This is one of the stupidest business models I think I've ever seen (and I'm kinda' old).

      Did you miss pets.com (selling 40 lbs bags of dog food and cat litter at cost with free shipping)?

    5. Re:Investors? by DogDude · · Score: 1

      I certainly did not miss it. That's the business I work in. We saw how stupid it was, and just waited for them to die.

      --
      I don't respond to AC's.
    6. Re: Investors? by Nidi62 · · Score: 1

      They're owned by an analytics company. Remember the outcry when they said they wanted to start tracking you before and after the movie? That's their profitability, their end game. They want the data of date night. They hope they can then sell that data to theaters, restaurants, bars, etc. Fscebook uses the whole social aspect to bring people in to harvest their data. Moviepass' lure is the cheap movies.

      --
      The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
    7. Re: Investors? by DogDude · · Score: 1

      But giving away free movie tickets is an absurdly expensive way to grab this data. People willingly give their data away for free in exchange for an electronic gee gaw. Give people a stupid fucking emoji or gif or something equally as useless, and they can have all of that data for free.

      --
      I don't respond to AC's.
    8. Re:Investors? by ShanghaiBill · · Score: 2

      at least one of their C*O's going to end up in jail.

      Why? It is not illegal to take money from foolish investors. If it was, most the financial industry would collapse.

    9. Re: Investors? by ShanghaiBill · · Score: 2

      I just don't see how we can base our entire economy on companies displaying ads and selling data to each other. At the bottom of the pile, doesn't someone need to actually make something for everyone else to market and sell?

    10. Re: Investors? by Anonymous Coward · · Score: 0

      Great, walmart can learn to stock gloves by the condoms so my fingers don't stank so much after I fingerbang Susan J. Rottencrotch during the latest flick.

      Who the fuck still goes to movies for dates?

    11. Re: Investors? by Anonymous Coward · · Score: 0

      Why make something new when you can get congress to extend ownership of intellectual property by another 40 years?

      Mickey Mouse will never die as long as Disney can keep that cash cow printing money.

    12. Re: Investors? by c6gunner · · Score: 1

      Why? It is not illegal to take money from foolish investors.

      Tell that to Charles Ponzi.

    13. Re: Investors? by Nidi62 · · Score: 1

      You're right, it's not worth that much This is why they are hemorrhaging money at the rate that they are.

      --
      The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
    14. Re: Investors? by gnick · · Score: 1

      At the bottom of the pile, doesn't someone need to actually make something for everyone else to market and sell?

      For a date night like one we're discussing tracking, somebody makes drinks, dinner, and a movie and those things are purchased my the daters. Deciding who provides those things could be influenced by ads. There is a bottom here.

      --
      He's getting rather old, but he's a good mouse.
    15. Re: Investors? by Anonymous Coward · · Score: 0

      So your proposed business plan is tell theaters to either give up 75% of revenue to me or you will lose 50% of your customers? And you think they will choose to lose 75% instead of 50%?

      What's your second plan, threaten to blackmail Bruce Wayne for cash or you will reveal his identity to the world?

    16. Re: Investors? by Anonymous Coward · · Score: 0

      Robots can do that shit. Humans will vie to influence what other humans spend they're credits on. People like me will gladly build and optimize those robots until only one of us is needed. And we will do it gladly to get deadbeat assholes who are only doing a job for a paycheck out of our workplace. If i get a little extra, great. If not, I will still design and build systems for fun, because i enjoy hat shit the same way others like to hit a little white ball with a club at a little hole in the ground.

      My job and my main hobby are mostly the same. You just don't get access to my hobby output unless you pay me. Because if you don't pay me, your competitors will.

      Not you of course, because you routinely post how you wouldn't hire someone from Slashdot, despite all the time you spend here such that even an AC can recognize your nick.

    17. Re: Investors? by nitehawk214 · · Score: 1

      Ad-based data-collection companies like Google and Facebook go absolutely nuts in the stock market.

      Maybe it is because it is hard to estimate what a giant company that lives almost solely on the vague concept of "eyes" is really worth?

      --
      I'm a good cook. I'm a fantastic eater. - Steven Brust
    18. Re: Investors? by Anonymous Coward · · Score: 0

      I just don't see how we can base our entire economy on companies displaying ads and selling data to each other.

      You'd think, but apparently the gold-rush of companies who don't actually make anything of value is still going on.

      At the bottom of the pile, doesn't someone need to actually make something for everyone else to market and sell?

      Oh, please, we're in the new new economy, where parasites and idiots account for zillions of dollars and the stock market would be wiped out without the bullshit valuations of companies which are worth 50 years of projected revenues.

      From POTUS on down, vaporware and piggy-backing off people who do real work, the fictional product and bullshit IP economy is the new hotness.

      But, generally, yes, I think you'd find that vast sums of money on the stock market are predicted on companies with no actual sales or products. The whole thing is a big Ponzi scheme with idiots at the helm.

      Most of these ad companies could cease to exist, and the real impact on anybody but their shareholders and employees would be minimal. And, quite frankly, I think their shareholders and employees deserve to lose everything as they go down with the ship.

      In this case, as has already been pointed out elsewhere, the 'business model' of MoviePass is patently absurd ... give away around $300/month in movies for $10/month. That works in one of two scenarios: 1) people paying for a subscription they'll never use, and 2) somehow gaining leverage over the movie studios to get a better price, because you have an app. You can't build a business model on 1), and 2) is not going to happen because the studios are even greedier and hold all of the cards.

      So, the business model seems to be sell products you don't control and don't set the price, but do it at a loss, and then hope that as if by magic your app bails you out of this. Quite frankly, only an idiot would have bought into this company.

    19. Re: Investors? by Anonymous Coward · · Score: 0

      For a date night like one we're discussing tracking, somebody makes drinks, dinner, and a movie and those things are purchased my the daters.

      Yes, and they're likely going to go to a place which is near where they're going, and at which they've had a good experience.

      Unless you're somewhere new, you probably already know what those are near where you're going.

      Deciding who provides those things could be influenced by ads.

      Speaking personally, ads influence very little of my behaviour ... in large part because I block the hell out of them and tune out the other ones.

      A restaurant either has good service, or it doesn't .. and it either has value for money, or it doesn't. For me, a single episode of bad service pretty much means you don't get a second chance. An add won't change that.

      I'll take 'OK' food and awesome service over fantastic food with crap service. So some of the restaurants I frequent aren't anything special, but they have great staff and awesome service. Not so long ago I went to a place that had decent food, but we never saw our waitress again, and when we did she just seemed like it was inconvenient to go get the things she'd already been asked to get; that place will never see me again.

      There is a bottom here.

      Yes, but apparently that involves giving away far more than you make, and praying that eventually that flips around.

      The only bottom line I see here is someone raising another billion or so trying to prop up a business model which is bleeding money.

      Time was you'd have a business idea, and it would work or it wouldn't. Now you get a bunch of VCs looking to throw more money down the well in the hopes they can cash in on the next big thing.

      This, I don't think is the next big thing.

    20. Re: Investors? by Anonymous Coward · · Score: 0

      The issue with Ponzi schemes is fraud. There is no actual investment, the "investors" are *lied* to about the nature of the source of money for the return.

    21. Re: Investors? by gnick · · Score: 1

      Speaking personally, ads influence very little of my behaviour ...

      You may think that, and you may be right, but everyone thinks that. Some big players are betting big money that you're wrong.

      --
      He's getting rather old, but he's a good mouse.
  2. How did it hit $32?? by Anonymous Coward · · Score: 3, Interesting

    Something is very strange about their stock that it randomly goes from about $2/share to $32 a share from Sep 12 to Oct 11 2017 (https://finance.yahoo.com/quote/HMNY). Then it's proceeded to decline since this suspicious bubble up. What drove it up in the first place??

    1. Re:How did it hit $32?? by Anonymous Coward · · Score: 0

      Tesla. HYPErloop. Solar Roadways. Bitcoin. Etc.

      Never underestimate the power of stupid people and their investing wallet.

    2. Re:How did it hit $32?? by nitehawk214 · · Score: 1

      So their stock price went through the roof when their revenue cut by more than half?

      That sounds almost like an orchestrated pump and dump scheme. I'm sure the SEC is keeping an eye on how many C-level execs cashed out.

      --
      I'm a good cook. I'm a fantastic eater. - Steven Brust
  3. Well, at least by Bruce+Perens · · Score: 2

    These investors are smarter than the ones who shorted Tesla. That's all I can say :-)

    --
    Bruce Perens.
  4. They should have an ICO by Anonymous Coward · · Score: 0

    It’s what all the cool kids are doing.

  5. MoviePass's South Park Inspired Business Plan by Anonymous Coward · · Score: 0

    1. Give away all of the investors' money.
    2. ???
    3. Profit.

  6. "invest in cash-burning operations"!? by kiviQr · · Score: 1

    How many MBAs you need to read and undersdand "invest ... in cash-burning operations"?

  7. Comment removed by account_deleted · · Score: 1

    Comment removed based on user account deletion

  8. Comment removed by account_deleted · · Score: 2

    Comment removed based on user account deletion

  9. Cuecat of Movies by QuadEddie · · Score: 1

    This is the cuecat of movie watching. How much can you give away hoping to become the monopoly while theaters just wait for you to die?

    1. Re:Cuecat of Movies by Anonymous Coward · · Score: 0

      How much can you give away hoping to become the monopoly while theaters just wait for you to die?

      How much have you got? :-P

      The reality is, the movie studios and movie theatres see no benefit to themselves in giving some startup with an app what they want.

      MoviePass has no leverage here. Far larger corporations who have real revenues and products and far deeper pockets aren't going to feel any pressure to cut them a deal, what's in it for them? They're not really going to lose any business because MoviePass keels over.

  10. Short it. by Anonymous Coward · · Score: 0

    If you think the price doesn't reflect the underlying value of the company then short it.

    Oh wait! Shorts are evil on Slashdot.

    1. Re:Short it. by Anonymous Coward · · Score: 0

      That's dangerous on a 22cent stock. If you were going to short it and make money, you should have bought puts when it was $32/share