MoviePass Owners Trying to Raise $1.2 Billion

MoviePass parent company Helios and Matheson Analytics filed on Monday to raise $1.2 billion to [...]

MoviePass parent company Helios and Matheson Analytics filed on Monday to raise $1.2 billion to ensure the movie subscription service continues to thrive, THR reports.

The service — which allows subscribers "unlimited" movie theater visits for $9.95 a month — filed a shelf registration offering institutional investors equity and debt.

Helios and Matheson CEO Ted Farnsworth told THR he plans to access the funds raised over the course of a year or two. Some of that $1.2 billion will be used to make acquisitions — MoviePass' planned purchases go unnamed — and the service intends to pull profit by marketing films and other items and selling data.

The company further plans to form concession and ticketing relationships with theater chains that hope to profit off the traffic MoviePass can generate: the service has been known to drive as much as 50% of the box office on some releases, especially less-talked-about movies consumers may not consider worthy of a full-price ticket.

"They've been predicting our demise for eight months and we're still standing," Farnsworth told THR, saying the funds raised would mean MoviePass having "a big war chest behind us."

MoviePass, Farnsworth said, will have 5 million subscribers by the end of 2018 and will generate $600 million in annual revenue. The company may reverse-split its stock as a means of both raising more money and to ensure its shares are not delisted from Nasdaq, as HMNY trades around $0.23—$0.31, which falls below Nasdaq's listing threshold.

"I was at a conference with Amazon CEO Jeff Bezos in around 1999 when a headline referred to the company as 'Amazon.bomb.' Well, look who's laughing now," Farnsworth said.

Theater chain AMC — the U.S.' largest movie exhibitor — launched its own subscription service, AMC Stubs A-List, allowing buyers to see three movies a week in premium formats like IMAX and RealD 3D for $19.95 a month. That competition helped MoviePass, Farnsworth said, because news coverage noted MoviePass' offerings came at half the price.

The CEO further noted much of that $1.2 billion would go to its production company, MoviePass Films, as well as film investment asset MoviePass Ventures, which has already put money behind American Animals and Gotti.

Both films — which received prime placement in the MoviePass app as well as push notifications for users — failed to make a mark at the box office.

Evan Peters-starring crime caper American Animals pulled in just over $2 million and John Travolta-led biographical crime drama Gotti fell short of $4 million. That film has a rare 0% "rotten" on Rotten Tomatoes with 37 reviews counted.

"This is a game changer," Farnsworth said, "Now they know that we are not going away."