Helios & Matheson, the majority owner of MoviePass, is getting smoked for a second day in a row after more financial difficulties come to light for its movie theatre subscriptions service.
The stock was trading down more than 7% Friday, at $2.38, just 6% of its all-time high of $38.52 set in October.
HMNY has been losing an average of $20 million per week since September, it admitted in a prospectus filing this week. That same filing priced new shares of the company’s stock well below where the stock was trading, leading to a dramatic selloff on Thursday.
To make things worse, Back-to-back financial statements filed by the company this week also include a discrepancy in numbers. When asked about the difference by Business Insider, MoviePass said its prospectus included an error that would be corrected.
Erik Gordon, a clinical assistant professor at the University of Michigan’s Ross School of Business, told Business Insider that the situation is scary.
“A complex financial structure with a cash-losing business, it’s scary,”he said. “It’s clear they can bring people in — it’s not clear they can make any money.”
Jason Guerrasio and Nathan McAlone contributed to this report.
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