Are the credits rolling on MoviePass?
|Amber Jamieson||Jul 31, 2018|
Better Have My Money: learning 'bout stocks so we all get rich
Welcome to Better Have My Money, my Monday night newsletter about stocks for people who feel out of their depth when it comes to the stock market. Better Have My Money is a gif-filled rundown of me learning about my own tiny new stock portfolio (from why we should care about shares when the world is burning, to figuring out which public companies are run by women, and picking cheapish stocks to buy) and sharing that knowledge with others who might know nada about stocks.
This week my own stocks look like trash so instead let's focus on a company I'm not invested in and therefore I can just weirdly enjoy watching its mistakes while hoping it still exists so I can keep going to the movies without having to pay! Yes, I'm talkingHelios and Matheson Analytics Inc (HMNY), which owns MoviePass.
The stock price dropped 60% today. It's dropped 99.85% in the last three months. Things are... bad for MoviePass.
I mentioned this company back in the beginning of June, when we were talking about cheapish stocks, not long after the stock price had collapsed. I was a little concerned that maybe I was like 'wut a guaranteed stock winner' but luckily even this non-financial expert was not that stupid:
"this is maybe a TERRIBLE stock idea or maybe genius, we'll see... Considering how low it is, maybe worth dropping a tiny amount of money you're OK with losing?"
Basically my thoughts on it remain the same, except just with more certainty that you'll lose your money.
I signed up for MoviePass and got my card in April. Basically you pay about $10 a month, or $90 a year, and you can see a movie in a cinema every day. You check in on the app and then use your MoviePass card to "pay" for the screening, meaning that cinemas still get paid by MoviePass for each customer.
That means a lot of cash is needed to pay for all those movie screenings. The more subscribers it gets (and subscribers jumped from 20,000 to one million in the last year), the more it has to pay cinemas, at full price.
As MoviePass has bled money in recent months, the rules have changed slightly as they've introduced things to try and help, for example introducing peak pricing if it's a popular or brand new film, and making it so that each customer can only view a film once.
But last weekend the app was temporarily unavailable,because the company ran out of cash and needed to borrow $5 million in order for customers to keep using it. (Of course they claimed at first it was "technical issues" but the technicality was that it had no money).
Last night I tried to use MoviePass and... the movie sessions weren't available. Like, I could see they were still available for purchase on the cinema website but MoviePass no longer listed the 6pm session time as a possibility, just the late session (and 9.50pm on a Sunday night is too late, let's be real).
Lots of people reported that the app simply showed that no screenings were available, at all, in their area. Hmmmmm OK then.
Last week their stock went through a 1 for 250 reverse split, meaning 250 stocks were now equal to one.
Confusing term of the week: "stock split" — so a split usually happens when a stock has become too expensive, and the board of directors vote to split the stock and make it more affordable. Apple split their shares back in 2014 (7 to 1) to make it more affordable and attractive to investors.
HMNY did the opposite by having a reverse split, hoping to raise the price. That's because if a company trades with a stock for less than $1 for a certain period of time, they can be delisted by the stock exchange as it's not viewed as being valuable enough. Right now, HMNY has traded below $1 for so long that it can get kicked off the Nasdaq from mid-December.
I have a pal who spent $20 just over a week ago, buying 191 shares. Days later, the stock split, meaning he suddenly had "one" share. That $20 is now worth... 82 cents.
In light of MoviePass being a financial mess but a cultural boon, maybe donate some cash this week to Tickets for Kids, a charity which arranges tickets to cultural events such as films and museums to low-income children.
So right now my own stocks look like a bloody disaster. Netflix just keeps dropping and dropping ever since its crappy quarterly earnings review. After being up over 30% what I'd paid for it just last month, Match Group (MTCH), owners of Match.com, OK Cupid and Tinder have dropped to under what I paid. Estee Lauder is also back to being the same price I paid for it in Feb. My weed shares, Cronos Group, are down over 30%.Last week I purchased one additional Netflix stock (hey big spender) (also actually a big spender cause those f*ckers are $355 and it's not like I'd just drop that money on a pair of shoes or a dress without it being a HUGE deal) and also some Starbucks stock. We'll see how those grande mocha caramel frappuccinos go.
Megan: "i look forward to reading each @bhavemymoney newsletter way more than i should for someone who hasn't invested anything yet" — Megan said she was going to try investing in ETFs, what did you choose, give us an update Megan.
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And finally, despite everything I wrote about MoviePass just now, I've been thinking about this tweet all week (and I paid upfront for an annual subscription but have only got about $50 worth, so I'm going to try and keep dancing in this street hydrant this week):