- It's another stumble for MoviePass, which in recent months has repeatedly adjusted its movie subscription plans and taken out hefty loans to cover massive losses.
Sara Salinas | Jim Forkin
The New York Attorney General Barbara Underwood has opened a probe into MoviePass parent company Helios and Matheson, a source familiar with the matter told CNBC.
The attorney general's office is investigating whether the company mislead the investment community regarding the company's financials, the source said. The investigation is in the early stages.
The attorney general is using the Martin Act, a statute designed to protect New York investors.
It's another stumble for MoviePass, which in recent months has repeatedly adjusted its movie subscription plans and taken out hefty loans to cover massive losses.
In August, Helios and Matheson reported it lost $100 million in the second quarter, putting the company on pace to blow through its remaining assets in the span of months.
The company skyrocketed to popularity with an initial subscription that allowed moviegoers to see a film a day for $9.95 per month. But the popularity hurt profits, and MoviePass over the course of just a few months, adjusted the plan to limit the available movies, raise monthly prices and restrict the number of films users could see per month.
Shares of Helios and Matheson fell 3 percent in extended trading Wednesday, though the stock trades for just 2 cents per share. A spokesperson for Helios and Matheson declined to comment.
This story is developing. Please check back for updates.
With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, and CNBC World, CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information 410 million homes worldwide, including more than 90 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 15 live hours a day of business programming in North America (weekdays from 4:00 a.m. - 7:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.
CNBC Digital delivers more than 52 million multi-platform unique visitors each month. CNBC.com provides real-time financial market news and information to CNBC's investor audience. CNBC Make It is a digital destination focused on making you smarter about how you earn, save and spend your money by zeroing in on careers, leadership, entrepreneurship and personal finance.
CNBC has a vast portfolio of digital products, offering CNBC content to a variety of platforms such as: CNBC.com; CNBC PRO, a premium service that provides in-depth access to Wall Street; a suite of CNBC mobile apps for iOS and Android devices; Amazon Alexa, Google Assistant and Apple Siri voice interfaces; and streaming services including Apple TV, Roku, Amazon Fire TV, Android TV and Samsung Smart TVs. To learn more, visit https://www.cnbc.com/digital-products/.
Members of the media can receive more information about CNBC and its programming on the NBCUniversal Media Village Web site at http://www.nbcumv.com/programming/cnbc. For more information about NBCUniversal, please visit http://www.NBCUniversal.com.