MoviePass Experienced An Outage Last Night As Company Ran Out Of Money

Back in April, Helios & Matheson (parent company of MoviePass) CEO Ted Farnsworth shrugged off any money issues the service had, saying the company has “hundreds of millions of dollars of dry powder, and I’ve got bankers and debt-financing companies calling me all the time.”

Boy, how times change.

Last night, MoviePass subscribers from all over the country flocked to the theater. You have to imagine that many of them were amped on seeing the latest ‘Mission: Impossible’ film, where Tom Cruises risks life and limb for your hard-earned ticket-buying dollars. Then, as they approach the theater, tragedy! Their MoviePass app wouldn’t allow them to check-in.

Uh oh.

Well, according to an SEC filing on Friday (via Business Insider), Helios & Matheson (the aforementioned parent company) admitted that they had to borrow $5 million in cash to take care of a “service interruption” on Thursday. Long story short, the subscription service ran out of cash and the lights got cut off.

The official filing read:

“The $5.0 million cash proceeds received from the Demand Note will be used by the Company to pay the Company’s merchant and fulfillment processors. If the Company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass, Inc. (‘MoviePass’), which would cause a MoviePass service interruption. Such a service interruption occurred on July 26, 2018.”

Of course, last night, the subscription service was hush-hush about the details, alluding to a more technical problem. MoviePass tweeted, “We are still experiencing technical issues with our card-based check-in process and we are diligently working to resolve the issue.”

This was followed by another tweet saying, “We’ve determined this issue is not with our card processor partners and will be continuing to work on a fix throughout this evening and night.”

Obviously, the company isn’t going to tweet, “Shit, we ran out of cash, our bad!” but these tweets are clearly hiding the bigger issue. And it’s something that is what we all expected to happen — MoviePass is on the verge of collapse.

Sure, this is only a temporary fix, borrowing cash to keep the lights on, and things could turn around, but it definitely sounds like this is a company that is really, really, really in trouble. No more proclamations about how business analysts are wrong. No more assurances that everything is going to be okay, as long as they reach their goals. It’s now officially affecting how paying customers use the service.

To all my fellow MoviePass subscribers out there, use caution. It looks like we’ve entered the beginning of the end.