About a week ago we reported that we may be in the last days for movie ticket subscription service MoviePass. The company reported that they only had $15.5 million in available cash when they usually spend over $20 million provided tickets to their customers. The company reported that they needed more than five million subscribers before they started breaking even and they hadn’t hit that number yet. When the report was published the stock for the company started to nosedive, dropping 22%, as people thought these could be the last days because of the math despite the reassurances that MoviePass wasn’t going anywhere.
The company may be looking to get ahead of the bad press since Ted Farnsworth, head of the parent company for MoviePass Hellos & Natheson, spoke to Variety about what he called a “feed frenzy”.
“There’s been a feeding frenzy of negativity, but it’s not going to slow us down,” said Farnsworth. “I’m not worried at all. You’re going to see. We’re doing more acquisitions of movies and companies.”
Farnsworth was particularly offended by a comment AMC Chief Executive Officer Adam Aron about how MoviePass just isn’t sustainable in its current form.
“They’re trying to put us out of business,” said Farnsworth. “We’ve become a serious threat.”
The idea that AMC could have any investment in whether or not MoviePass goes under is silly. Movie theaters make a majority of their profits off of concessions and not tickets. The MoviePass means that the company is buying the tickets from AMC and other theaters. If anything they would want MoviePass to continue because if someone isn’t shelling out $40 for tickets they are much more likely to spend money on concessions.
Regardless of the drama MoviePass seems confident that we’re going to see something big break during the Cannes Film Festival along with the premier of the new John Travolta movie Gotti which they are releasing in conjunction with Vertical Entertainment.
The Helios CEO said that he was finalizing a major acquisition in the coming days that will be announced at the Cannes Film Festival. “It’s going to be substantial,” said Farnsworth. “People are going to go, ‘Hmm how did they pull it off?’”
We’ll have to see how things go but all the promises in the world won’t matter to the investors if the stock price or the subscriber count don’t start growing soon.
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