MoviePass is Facing a Class-Action Lawsuit From Shareholders
It’s no secret that MoviePass is in deep doo-doo. The last month or so has featured several blunders with the most recent one involving resubscribing people who had canceled their service. Needless to say, customers aren’t happy with the company. However, it’s not just the customers that are angry. After reporting a loss of $126.6 million for the recent quarter, shareholders of MoviePass’ parent company Helios and Matheson (HMNY) are filing a class action lawsuit against the company. With stock down to $0.05 each, Jeffrey Braxton filed the suit against HMNY’s CEO Ted Farnsworth and CFO Stuart Benson touting:
“MoviePass’ business model was not sustainable because there was no reasonable basis to believe MoviePass could monetize the model to a degree that could be maintained before being too buried in debt to survive.
False and misleading statements or material omissions … caused the damages suffered by [Braxton] and the other class embers.”