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Helios and Matheson files confidentially to spin off MoviePass

Investors reacted positively to news the company plans a spin-off and to distribute some shares as a dividend
Cinema tickets
The company said it has created a new subsidiary called MoviePass Entertainment Holdings Inc to take ownership of its MoviePass stake

Helios and Matheson Analytics Inc (NASDAQ:HMNY), the parent company of MoviePass, said Thursday it has filed confidentially with the Securities and Exchange Commission to spin off its beleaguered cinema discount-ticketing program.

The company said it has created a new subsidiary called MoviePass Entertainment Holdings Inc to take ownership of its MoviePass stake and other film-related assets held by Helios and Matheson. The company will spin off shares by listing on Nasdaq, or an alternative exchange, and distribute some of the shares as a dividend to shareholders as of a record date yet to be selected.

Investors cheered the move and sent shares up nearly 7.1% to $0.0149 Thursday monring.

READ: MoviePass owner Helios & Matheson clarifies reports that its CEO secured $65M in new funding

Helios and Matheson said in the S-1 registration statement that it plans to retain control of MoviePass Entertainment. The company’s board proposed a reverse stock split in a ratio of up to 1 share for 500 shares at a shareholders’ meeting on October 18, according to a statement provided to the SEC.

The move comes months after the company orchestrated its first reverse stock split last July, which gave investors 1 share for every 250 owned.

The first stock split set a temporary floor under Helios & Matheson’s shares, pushing them up above $22, but the stock has been cratering ever since.

In another rescue attempt, Helios and Matheson recently introduced a new business plan that allows subscribers in the popular MoviePass program to see up to three movies per month for $9.95 and also receive a $5 discount for any movie tickets beyond the first three.

Earlier this year, the company disclosed in an SEC filing that it was burning through as much as $20 million in cash per month on average.

Contact Uttara Choudhury at [email protected]

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