MoviePass’ majority owner, Helios and Matheson Analytics (NASDAQ: HMNY) saw its share slip on Friday after rising doubt about MoviePass’ profitability. Helios and Matheson shares fell by 6.27 percent on late afternoon on Friday.
"MoviePass has incurred losses since its inception and has a present need for additional funding. These factors raise substantial doubt about the Company's ability to continue as a going concern," Helios and Matheson Analytics said in its annual report.
MoviePass has been netting Helios and Matheson a net loss on average of $20 million a month, which isn’t too surprising considering the fact that MoviePass’ service allows customers to pay a flat monthly fee of $9.95 to watch a movie every day for the month.
Helios and Matheson announced on Thursday it was also selling $30 million worth of new shares through warrants at a stock price of $2.75, representing a price 30 percent lower than Wednesday’s closing value.
The news of the stock selloff and MoviePass’ doubt has led the stock to plunge nearly 51 percent since Tuesday’s high.
Although, MoviePass hasn’t had much luck with its profits, the company is still growing at a rapid pace. In February, the company reported 2 millions subscribers, after climbing to 1.5 million just one month before.
Regardless of the customer growth, the company still worries investors that it will never become profitable if it maintains its low-priced service.