Even as Helios and Matheson CEO Ted Farnsworth claims that MoviePass will be making $600 million by the end of 2018, shares of the parent company behind MoviePass plummeted to a new low on Monday (July 17). The stock plunged to 12 cents, but Farnsworth said that money hasn’t been a problem in a recent interview, TheStreet reported.
“The money issue on my side has never been an issue,” Farnsworth had previously told TheStreet. “I don’t mean that to be cocky or arrogant, but people see what it is. When you go to a movie theater, half of the people there have MoviePass. The investors on Wall Street understand that and they understand that model, so for us, to sustain that and go forward is not a problem.”
In order to make the company profitable, Farnsworth plans to use the three million MoviePass subscribers to increase the company’s revenue by $6 to $8 per customer. And Farnsworth projects that the company’s subscription service itself will turn a profit after reaching five million customers.
The news comes after the company announced earlier in July that it will sell up to $1.2 billion of equity and debt securities over the course of three years. In a press release, Helios and Matheson announced it had filed a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission (SEC). The shelf registration will give the company the flexibility to finance growth, including for MoviePass, MoviePass Ventures, MoviePass Films and Moviefone.
In June, Helios and Matheson announced that it was issuing $164 million in bonds and 20,500 shares of preferred stock. In a press release at the time, the MoviePass parent company said the net proceeds from the offering and preferred stock would be used for general corporate purposes. The company said the notes would be convertible at a conversion price of $1, subject to adjustment. The preferred stock would not be convertible into common stock. Each share of preferred stock was entitled to 3,205 votes per share.
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