At this time last year, MoviePass was the darling of the entertainment industry, boasting millions of subscribers and a cult following. But since then, the business model has proved faulty, causing the company to repeatedly pare down its once-generous subscription plan. That prompted a swift backlash from its subscribers.
But it's not just movie buffs who are feeling hurt by the company. Ted Farnsworth, CEO of MoviePass parent company Helios and Matheson Analytics, has taken a financial beating. Thanks in part to the failures of MoviePass, $7.25 million worth of Helios and Matheson stock Farnsworth was awarded in 2017 was worth less than $50 as of Dec. 8, as Quartz pointed out after a Dec. 10 SEC filing by the company.
To put the plunge in perspective, shares of Helios closed at $2,520 on Dec. 12, 2017, and on Dec. 12, 2018, they are trading at less than 2 cents.
According to SEC filings, Farnsworth's total compensation for 2017 was $8.9 million, about 80 percent of which consisted of stock (then worth $7.25 million). Farnsworth's base salary for 2017 was $225,000 and he received $1.35 million in cash bonuses and $76,050 in housing expenses.
Helios acquired MoviePass in December 2017 but announced in October that it plans to spin MoviePass off into its own entity, MoviePass Entertainment Holdings. The new entity, the company has said, will be publicly traded.
"Since we acquired control of MoviePass in December 2017, HMNY largely has become synonymous with MoviePass in the public's eye, leading us to believe that our shareholders and the market perception of HMNY might benefit from separating our movie-related assets from the rest of our company," Farnsworth previously said in a statement.
After the spinoff announcement, shares of Helios spiked, but were still trading at pennies per share. While such a move might benefit Helios on Wall Street, it's still unclear whether the company will be able to execute the spinoff.
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