The end could be in sight for MoviePass.
After MoviePass parent company Helios and Matheson Analytics Inc. Was unable to pay its business partners, customers were unable to use the service, Bloomberg reported.
The MoviePass app is in service again, but stopped working Thursday and continued to have technical issues through Friday. On Twitter, MoviePass said it was investigating the problem, but provided no further details beyond saying that the issue wasn’t because of its card processor partners and that e-ticketing was still available.
Https://twitter.com/MoviePass/status/1022664321330020358
According to a Friday filing with the SEC, the cash-strapped company has borrowed $6 million from investment firm Hudson Bay Capital Management. However, it’s a very temporary fix. Hudson Bay can require that half of the loan be repaid by Aug. 1 and the remaining half by Aug. 5. If Helios and Matheson Analytics doesn’t make the deadline, it will be on the hook for a 15% annualized late fee until the payment is delivered. If it’s 48 hours late, Helios and Matheson Analytics could also end up paying 130%.
Helios and Matheson Analytics’s stock dropped over 60% Friday.
After MoviePass drastically cut its price from $30 or more a month to $9.95, many believed the deal was too good to be true. To keep up with operating costs, MoviePass began implementing more conditions, including peak pricing and disabling the ability to watch a movie multiple times. Since its inception, MoviePass has also faced competition from a growing roster of alternative services, including Sinemia and AMC Theatres. While those options tend to be more expensive or allow for fewer viewings, they’ve been considered less risky.
In a service update, MoviePass apologized to customers for the inconvenience and explained that its changes like peak pricing were made in order to keep the service available without an overall price increase. The release did not explain the cause for the app to stop working.
Coins2Day reached out to MoviePass for comment, but did not receive a reply.