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MoviePass money woes caused a service outage last night

Its parent company borrowed $5 million to get back up and running.
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Rob LeFebvre/Engadget

MoviePass customers experienced a service outage last night and it turns out it's because the company ran out of money. Business Insider reports that MoviePass' parent company, Helios and Matheson Analytics, wasn't able to make necessary payments due to a lack of funds, so it borrowed $5 million. "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," Helios and Matheson Analytics said in an SEC filing. "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."

MoviePass' money problems have been no secret and it has taken to service changes like surge pricing and business moves like debt and equity sales, a reverse stock split and bond sales in order to stay afloat. Meanwhile, companies like Sinemia and theater chains like Alamo Drafthouse and AMC are offering their own subscription services to rival MoviePass'.

In a series of tweets last night, MoviePass, which also suffered a service outage earlier this month, acknowledged the problem and said it was working on a solution.

Via: The Verge
Source: SEC
Coverage: Business Insider
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