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MoviePass Stock: 5 Facts to Know Before Buying or Selling

Laura Woods
Photo by Darron Cummings/AP/REX/ShutterstockCassie Langdon holds her MoviePass card outside AMC Indianapolis 17 theatre in Indianapolis.
  • MoviePass stock value crashed in the wake of a service interruptionnew subscription revenue increase measures, and other disappointments.
  • MoviePass stock dropped to $0.496 as of 3:55 p.m. PT on July 31, 2018.
  • The company has over 91 percent of U.S. movie theaters participating, but is limiting the availability of certain first-run movies during the first two weeks.

MoviePass stock is fighting for its life. On Tuesday, July 31, its parent company Helios and Matheson Analytics Inc. announced new cost-cutting and subscription revenue increase measures, in an effort to reduce its monthly cash burn by 60 percent.

One major change involves increasing the standard monthly subscription price to $14.95 — a hike of about 50 percent from its current price of $9.95 — within the next 30 days. Additional measures include limiting the availability of first-run movies opening on more than 1,000 screens during their first two weeks in theaters.

Click to read about movies critics hated that performed well at the box office.

“These changes are meant to protect the longevity of our company and prevent abuse of the service,” said Mitch Lowe, MoviePass CEO and a co-founding executive of Netflix, in a press release.

“While no one likes change, these are essential steps to continue providing the most attractive subscription service in the industry,” Lowe said. “Our community has shown an immense amount of enthusiasm over the past year, and we trust that they will continue to share our vision to reinvigorate the movie industry.”

Read: The Ups and Downs of Netflix’s Stock as the Company Turns 20

5 Facts to Know Before Buying or Selling MoviePass Stock

MoviePass news hasn’t been great lately. If you own Helios and Matheson Analytics Inc. stock, here are a few facts to help you decide whether to buy or sell. It’s also wise to keep a close watch on the MoviePass stock price, as this is a key indicator of its health.

1. The Reverse Stock Split Only Adjusted Share Prices for a Day

Helios and Matheson Analytics Inc. implemented a 1-to-250 reverse stock split — in which shareholders traded in 250 shares of the company for one share — at market close on July 24, 2018. This adjusted the stock’s closing price for the day from 8.5 cents to $21.25, but it was back down to $0.496 as of 3:55 p.m. PT on July 31.

2. MoviePass Stock Could Be Delisted

If a company trades for less than $1 per share for 30 consecutive business days, it could be delisted, according to Nasdaq rules.

3. MoviePass Had to Borrow Millions to Cover Operating Costs

MoviePass ran out of cash to pay its merchant and fulfillment processors, which caused a service interruption on July 26. The company had to borrow $5 million to pay its merchant and fulfillment processors, according to a Securities and Exchange Commission filing from July 27.

4. Reviews Are Mixed

Once considered too good to be true, MoviePass reviews have been decidedly dicey since the company started enabling cost-cutting changes, which isn’t a good sign for business.

5. MoviePass Still Has Potential

The MoviePass theater list includes over 91 percent of theaters in the U.S., creating massive market share potential.

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Should You Keep or Cancel Your MoviePass Membership?

If you have a membership — or you’re monitoring membership stats to decide whether to hold or sell your stock — the answer to that is really a matter of personal preference.

The membership price will increase to $14.95 per month within the next 30 days, but that’s still a good deal. The average price of a movie ticket was $8.97 in 2017, according to the National Association of Theatre Owners, so two monthly trips to the theater will more than cover the cost.

Because certain first-run films will be limited in their availability during their first two weeks, MoviePass probably won’t be a good fit if you like to be first in line. If independent films are more your style, however, its renewed focus on smaller movies should suit you just fine.

Click through to read more about great gifts for movie fanatics.

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This article originally appeared on GOBankingRates.com: MoviePass Stock: 5 Facts to Know Before Buying or Selling