Helios & Matheson jumps over plan to spin off MoviePass
Shares in Helios & Matheson Analytics rocketed 81% after the company announced its plans to spin off its subsidiary MoviePass as a separate company.
The spin-off is part of the company's plan to create a film production, marketing and exhibition company.
"Since we acquired control of MoviePass in December 2017, HMNY largely has become synonymous with MoviePass in the public's eye, leading us to believe that our shareholders and the market perception of HMNY might benefit from separating our movie-related assets from the rest of our company," said chief executive Ted Farnsworth.
The announcement comes just days after the New York attorney general’s office said it would be investigating the company and whether it had misled investors
In the past, Helios and Matheson was controlled by an Indian company (Helios and Matheson Information Technology), which was accused of defrauding at least 5,000 creditors in India, including banks and senior citizens. Currently, MoviePass accounts for all of Helios and Matheson's business.
According to Markets Insider the Nasdaq listing of Helios and Matheson is crucial to MoviePass, allowing the app to fund hundreds of millions of dollars in losses by sharing new shares of Helios and Matheson stock to the public and diluting the existing ones.
Some investors told Business Insider that they had lost over $100,000 on the stock.