New Hope? New Monthly Plans? A New Moviepass Model!

Updating this quickly after the new ATM news. I can only assume the worst here. I assume the following now.

  • The company is desperately broke and sales of the yearly plans did not work well
  • Utilization likely still too high

Why any institutions would give these guys any money at all is a puzzling thought.

Assume the business model and my financial model are off. Things look bad.

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I have created a very quick new back of the envelope model for Moviepass.

This is a pretty wild guess and it may be way too optimistic.

A few key points on this model – and why it could be way off:

  • The company has not shared an updated official subscriber number in months
  • Former Utilization rates claimed by management are not reliable.  The new limited plans have not been in the market long enough to be reliable predictors of consumer usage.
  • Churn rates from old plans and uptake on new plans are not well known.
  • The sales mix of the new plans is not known.

Why I believe the model could be near reality

  • Against all odds – the company seems to be surviving without new funding
  • The company has shown willingness to be brutal to consumers in order to survive – massively limiting inventory – making the product at times nearly impossible to use.   Thus it is likely sub numbers are way down, and usage is also way down.
  • I believe Moviepass will continue to limit the use of their lower end product.
  • I believe the uptake on higher end Moviepass products will be limited due to competition from AMC and limited consumer demand above $20 a month

I do not recommend buying the stock on this model.   Any feedback is welcome on Stocktwits.  Consider this a conversation starter for now.