by: Jayson Derrick Benzinga Staff Writer
Helios and Matheson Analytics Inc HMNY 5.73%, a data analytics company that owns a majority stake of MoviePass, plummeted earlier this week after it announced a $105 million public equity offering to potentially increase its ownership stake in MoviePass.
Helios and Matheson confirmed in a press release Friday it increased its total ownership stake of MoviePass to approximately 78 percent.
The increase in ownership stems from cash advances which Helios and Matheson provided to MoviePass through Feb. 15 to support its working capital, operational requirements, and support MoviePass' expansion, the company said. The total amount that was paid amounts to $45.5 million.
Why It's Important
The bull-bear argument for MoviePass' business remains unchanged, but Helios and Matheson's increased exposure to the company may have given bears more ammunition. Helios and Matheson's stock lost nearly 7 percent Friday morning and is down 25 percent since the start of 2018.
"Helios' capital investment has fueled our growth to approximately 2 million subscribers and enabled us to move closer to our vision of transforming the movie industry," MoviePass CEO Mitch Lowe said in the press release. "Our goal has always been to drive more people to the movies, while reinvigorating the entire ecosystem that includes theaters, studios and distributors. Our relationship with Helios makes that possible."
"We could not be more thrilled to hold a bigger stake in MoviePass, as the MoviePass phenomenon has become a major disruption to the entertainment industry," said Ted Farnsworth, CEO of Helios and Matheson. "The partnership continues to be a great benefit to both MoviePass and Helios and Matheson shareholders."
The stock traded around $4.74 at time of publication.
© 2018 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.