Helios and Matheson Analytics (HMNY) will spin off MoviePass and all movie-related activities into a separate public company. HMNY is an analytics company after all, and MoviePass has been a pretty bad investment for the company’s bottom line.
When HMNY acquired MoviePass last year, the company didn’t really care about creating a subscription service for movie theaters. HMNY wanted to attract enough subscribers to generate more data about the movie industry. This data could then be leveraged for targeted advertising.
But MoviePass has had so many financial issues that it’s hard to believe it’s still around. HMNY filed an S-3 to sell up to $1.2 billion in debt and equity. It doesn’t mean HMNY raised $1.2 billion for MoviePass, but it has the opportunity to do so.
$1.2 billion isn’t a big deal for the biggest tech companies. But HMNY has a market capitalization of $37.2 million as of yesterday’s closing price.
“Since we acquired control of MoviePass in December 2017, HMNY largely has become synonymous with MoviePass in the public’s eye, leading us to believe that our shareholders and the market perception of HMNY might benefit from separating our movie-related assets from the rest of our company,” the company said in a press release.
And sure enough, HMNY shares soared minutes after the announcement went live. Shares are currently trading at $0.024, up 42 percent compared to yesterday’s closing price of $0.0169.
The new MoviePass Entertainment Holdings company will be the parent company of the MoviePass subscription service, HMNY’s movie production company MoviePass Films, MoviePass Ventures and Moviefone, which HMNY acquired from TechCrunch’s parent company Oath. HMNY will then focus on RedZone.
You know what happens when you ask a kid to clean their room. They take the piles of toys on the ground and put everything under the bed. At least, all the mess is in the same spot now, away from the rest of the room. This is exactly what’s happening with MoviePass.