With the threat of falling from the Nasdaq Stock Exchange, the parent company of MoviePass approved a plan to increase its stock price by 250 times.
The Board Helios and Matheson ( gave the green light for a reverse stock split. )
Shareholders will trade 250 shares for one share worth 250 times. The stock price, which closed at around 8 cents on Tuesday, will rise to around $ 21
It is a largely cosmetic change for shareholders as their stakes would be valued equally after the reverse split. But it could hold stock trading on the NASDAQ Stock Exchange.
The stock became so cheap that it was in danger of being removed from the stock market. It has fallen sharply as investors' doubts about MoviePass's ability to watch a movie a day at the cinema for $ 10 a month have grown.
Shareholders also voted to increase the number of common shares from $ 500 million to $ 5 billion so that the company can sell more shares. They also voted to increase the total number of shares in the share capital by the same amount.
Capital market development is an important part of Helios and Matheson's strategy to stay afloat.
In an interview with CNNMoney earlier this month, CEO Ted Farnsworth said his company had spoken with several of its institutional investors about providing additional money. Farnsworth said back then that there was "no shortage" of investors.
The details of the meeting were set out in a report filed with the Securities and Exchange Commission on Tuesday.
Related: MoviePass Share Is 19 Cent, But The Boss Says Everything Is OK
Helios and Matheson, who owns the popular movie subscription service MoviePass, has become an all-time high of nearly $ 39 per share traded last October. That's over when the company announced that the cost of MoviePass would be $ 10 a month.
Since then, analysts have been worried about the sustainability of the company when the price of its flagship is so low.
The price of service helped the enterprise to gain at least 3 million subscribers. But the stock price has also fallen by 99%.
Farnsworth has stated that the company will achieve profitability by the end of this year, largely due to subscriber growth. He expects that by then about 5 million people have been registered.
Helios and Matheson also try to increase revenue and awareness in other ways. She founded a department called MoviePass Ventures, which has invested in independent films that she can promote to subscribers.
MoviePass has also recently introduced a price scale that triggers extra costs for a particular ad when there is a high demand.
CNNMoney (New York) First published July 24, 2018: 12:48 pm ET