Cash-strapped MoviePass has backed off from plans to undergo a massive 500-to-1 reverse stock split, admitting that it couldn’t get enough stockholder support for the bizarre move.
The New York-based cinema subscription service had hoped to have the split approved to bolster its stock price, which currently sits below 2 cents, so as to not be delisted from the Nasdaq.
MoviePass parent company Helios and Matheson must see its shares trade above $1 for 10 straight days prior to Dec. 18 to maintain its listing.
It had initially planned to hold the vote on Oct. 18, but delayed it twice, first to Nov. 1 and then to Nov. 14, before abandoning it entirely.
“The board cancelled the special meeting because it does not expect to have the requisite stockholder votes to approve the proposed reverse stock split,” it said in a Tuesday filing.
MoviePass’ problems started when the company horribly underestimated how many movies subscribers would see after it dropped its all-you-can-eat monthly price to $9.95.
MoviePass pays theaters the full price of a movie ticket.
To stem the share-price decline, Helios in July underwent a 250-to-1 reverse split, boosting its stock to $22.25 a share — up from 8 cents.
But the cash burn continued to eat into the share price. MoviePass has since limited the number of movies subscribers can see each month to three from the previous one a day.
Helios shares were up 4.8 percent Tuesday afternoon, to 1.7 cents.


