The share price of Helios & Matheson, the parent company of MoviePass, has plunged in recent months amid ongoing losses at the subscription movie service.
But something else is weighing down the stock price — the more than 3,000% increase just since August in the number of the company’s shares.
That dilution is set to only get worse, as the company is seeking authorization to issue even more shares.
The stock price of MoviePass’ parent company has plunged amid mounting losses and dwindling cash reserves.
But you can also blame the fall of Helios & Matheson’s shares into penny stock territory on simple supply and demand.
To fund the ongoing losses from its movie subscription service and to keep itself in business, Helios & Matheson has issued more and more shares of stock, selling them to institutional investors and, increasingly, to the public.
The numbers are startling. Since August 15, when the company announced its agreement to take a majority stake in MoviePass, Helios & Matheson’s share count has increased a staggering 3,429%, from about 7 million shares to nearly 250 million at the end of last month.
Perhaps more incredibly, the company issued most of those shares just in the last two months as it …read more
Source:: Businessinsider – Technology