MoviePass' long tumble continues. According to CNBC, New York Attorney General Barbara Underwood is investigating the parent company of the movie theater subscription service to determine whether they misled investors regarding the financial health of their parent company.
The service became incredibly popular incredibly quickly, which made its initial promise of $9.95 a month for unlimited movies at local theaters unsustainable. MoviePass was operating at a huge loss and the company took on loans and updated its subscription costs and benefits to try and stay afloat. In the wake of this turmoil, the company's stock price plummeted.
According to MoviePass' parent company Helios and Matheson's own reporting, they lost $100 million in the second quarter of 2018. Following that report, investors filed two class-action lawsuits against the company. The lawsuits claim that Helios and Matheson made "materially false or misleading" statements about the company's financial health. The company has denied the claims and said that they are looking forward to the investigation from the New York Attorney General.
"We are aware of the New York Attorney General's inquiry and are fully cooperating with it. We believe our public disclosures have been complete, timely and truthful and we have not misled investors. We look forward to the opportunity to demonstrate that to the New York Attorney General," they wrote in a statement shared with several news outlets.
MoviePass has been accused of shady dealings away from the trading floor as well. Former MoviePass customers have accused the company of uncanceling their subscriptions without notice.
By the looks of it, MoviePass' turmoil won't end anytime soon.
