MoviePass Majority Owner Hit with Securities Class Action After Stock Prices Plummet

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A proposed class action has been filed in New York against Helios and Matheson Analytics Inc.—a global IT firm that moonlights as the majority owner of MoviePass, Inc.—and its CEO and CFO on behalf of those who purchased common stock in the company between August 15, 2017, and July 26, 2018.

Filed in New York, the complaint explains that MoviePass, until very recently, allowed subscribers to buy a single movie ticket every day for a flat fee paid each month, quarter or year. MoviePass only recently switched up this model, allowing subscribers to attend just three movies per month, the case says. 

The lawsuit concerns a series of press releases issued by the defendants between August 2017 and March 2018. According to the complaint, the press releases, the topics of which spanned the defendants’ acquisition of MoviePass, the service’s subscriber growth and ultimately the aforementioned subscription model change, were materially false and/or misleading in that they:

The kicker, according to the suit, was a late-July 2018 SEC filing in which Helios announced it had issued a demand note in the principal amount of $6.2 million because the company could not make timely payments to merchants and processing vendors, leading to a service interruption. Upon this revelation, Helios and Matheson Analytics stock sank approximately 70.72 percent, the complaint states, and fell even further in the following days.