The parent of MoviePass with a 92% stake, Helios and Matheson (NASDAQ:HMNY), saw its shares crumble to a new all-time low recently.
Despite traders showing their concern about the company, its CEO is feeling confident.
CEO Ted Farnsworth told TheStreet that MoviePass will go from burning cash to generating $600 million by the end of the year.
Shares of the stock had been sliding since last October, when it was revealed in SEC filings that the company burns $21.7 million every month to support the movie subscription service Movie Pass, that it had acquired in August.
“The money issue on my side has never been an issue,” Farnsworth told TheStreet. This was when the stock had hit a low of 17 cents a share. It continued to drift down even more after that.
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,” Farnsworth added.
The CEO has plans to make the company protiable in less than six months. He intends to leverage MoviePass’ 3 million subscribers to provide marketing and analytics to film studios to increase its revenue by $6 to $8 per subscriber. This is in addition to producing its own films.
According to Farnsworth, the subscription side of the business itself will be profitable when it hits 5 million customers. MoviePass allows its subscribers to see one movie a day for $9.95 a month. The subscription allows for any movie, any day, and any theater.
“I think there’s a concerted effort out there from AMC and other players trying to put us out of business, with the whole scare tactic of ‘can they survive,’ ‘are they sustainable,’ ‘can they make it,’ ‘they’re burning cash,'” Farnsworth said to TheStreet.
“Of course, we’re burning cash, but so does Amazon. And then there’s Netflix, doing original content and losing $4 billion this year.”
It was also recently that the company announced that it has commenced a best-efforts underwritten public offering, subject to market and other conditions, to issue and sell shares of its common stock and warrants to purchase shares of its common stock.
According to the company’s (NASDAQ:HMNY) press release, “The shares of common stock and warrants to purchase shares of common stock are being offered as units. The shares of common stock and warrants will be issued separately. There can be no assurance as to whether or when the offering may be completed, or to the actual size or terms of the offering. HMNY may use the net proceeds from this offering for general corporate purposes of HMNY and its subsidiaries and transaction expenses.”