MoviePass denies it misled investors amid NY fraud investigation
Helios and Matheson CEO Ted Farnsworth on Carl Schramm's departure from the company's board, the company's spending, subscriber base and growing competition.
Helios and Matheson Analytics Inc., the parent company of subscription-based movie ticketing service MoviePass, is denying allegations that it misled investors about its finances and said it’s fully cooperating amid a probe from the New York Attorney General’s office.
“We are aware of the New York Attorney General’s inquiry and are fully cooperating. We believe our public disclosures have been complete, timely and truthful and we have not misled investors,” a spokesperson for MoviePass said in a statement.
New York Attorney General Barbara Underwood is currently in the early stages of investigating whether the company misled investors on its financials, citing the Martin Act, which is an anti-fraud law often used to litigate issues related to securities trading.
News of the probe sent shares of Helios and Matheson Analytics (HMNY) crashing to nearly a penny.
But this isn’t the only hiccup the company has experienced in recent months. Over the last year, MoviePass has repeatedly adjusted its movie subscription price plan, and it has taken out hefty loans to cover its losses due to massive price cuts.
In August, Helios and Matheson reported a loss of $100 million in the second quarter.
A month earlier in July, its app experienced a temporary service outage for some users, adding to its already long list of functionality problems.