Investigation Opened Into Parent Company of MoviePass by New York AG

Helios and Matheson, the parent company for the once-popular movie subscription service, MoviePass, is now being investigated by the state of New York to see whether they may have misled investors about the company's finances. 

According to CNBC, New York Attorney General Barbara Underwood opened the investigation under her authority to protect investors in companies publicly traded on exchanges located in New York. 

"We are aware of the New York Attorney General's inquiry and are fully cooperating," Helios and Matheson said in a statement. "We believe our public disclosures have been complete, timely and truthful and we have not misled investors. We look forward to the opportunity to demonstrate that to the New York Attorney General."

MoviePass, once a Wall Street darling, saw its stock plummet over the summer following a series of embarrassing stumbles, after adjusting its movie subscription plans and taken out several loans to cover shortfalls. The movie subscription plan became incredibly popular last year after initially announcing a subscription that allowed movie lovers the chance to go to one film a day for only $9.95 a month. 

However, the company had to quickly adjust their strategy after the plan proved to be too popular. MoviePass changed the plan to limit the amount of movies a subscriber could see, then later, limited the amount of available movies people could purchase. 

Helios and Matheson reported a loss of $100 million during the second quarter in August, placing the company in danger of exhausting its remaining cash in the next few months. The company's stock lost 97 percent of its value, going from a high of $4,500 last year to a mere .018 cents per share as of Thursday morning. 

Photo: Getty Images


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