I felt like I owed it to my readers & myself to do an updated model based on new numbers coming from MoviePass management and new PR post the apocalypse of the past 4 weeks of the total HMNY stock wipeout.
Please click the link to my “models” page to check out the new model. I threw this together quickly – given I only have a few bucks left in this stupid stock. I figure I will keep on writing about it until it is totally dead since it is such a fascinating and totally bizarre stock that has followed almost none of the regular rules of investing that I have ever seen.
Key assumptions I made:
- I dropped the sub count down to 2.5M assuming a big chunk of customers are going to quit this month
- Increased the Sub ARPU based on updated pricing
- Simplified the incremental non-subscription revenue based on management guidance $4-6 – I started near the midpoint and raised it incrementally monthly – I had an error here and it is now fixed, I inputted month for QTRLY revenue and this was significantly off. Thanks to readers for reporting. My bad!!
- Utilization set at 1.6 – or 19.2 movies per year. Seems like an OK estimate given how much harder it is to see a movie now 🙂 . Seriously with Peak Pricing and Movie Blackouts – Utilization almost certainly goes down.
The model is much easier to read now – and easy to follow because management is now lumping all non-subscription revenue together.
From Press Release
“As of Q3 and beyond, MoviePass is also generating incremental non-subscription revenue of approximately $4 to $6 per subscriber per quarter:
Integration of MoviePass Ventures and MoviePass Films with our own original content allows us to gain revenue by owning the films through box office, streaming, DVD, retail, transactional sales e.g. Apple and Samsung, and international rights, etc. NOTE- updated the model to show QTR not monthly non-subscription revenue- thanks to readers – sorry I missed that. Less hope:-)
- Partnerships with 3rd party media inventory to increase scale and reach of marketing efforts driven by data
- Continued rollout and refinement of the Peak Pricing program
- Creating strategic marketing partnerships and promotions with studios, content owners, and brands
- Integration of Moviefone.Com to support the media buys of brands and studios”
Net of all this is that my new model says that MoviePass cash burn is going to go down and go down fast. A reasonable case can be made for breakeven f fairly quickly. With a revenue run rate near $150 Million a QTR or $600 Million a year.
Now don’t go off and spend your life savings buying stock in HMNY – I am almost certain Ted and Mitch will find a way to fuck this all up in ways we have not yet dreamed of, but there is a glimmer — oh so faint — of hope here.
If you do invest more than 2% of your portfolio in this, please send me your address so I can come directly to your house and punch you in the face.
Have fun with the model!