Stock Updates: SMSI Visits NYC (Plus, $FB $RDCM $HMNY $HLG)

Long-time readers should note some significant changes in how I communicate in the public domain. The primary purpose of this forum is now to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.

Accordingly, this document should not be construed as an endorsement or recommendation of the companies or securities discussed herein. I am not an investment advisor and this is not an investment thesis. It is merely one part of the story, which I present for debate in hopes of determining all risks and upside potential. The disclosure at the end of this piece is critical to understanding the content of this document. Further, I frequently trade my positions and may buy, sell, or short the securities mentioned herein at any time, regardless of the facts or perceived implications of this article.


Smith Micro (SMSI) Tours NYC

“They seemed pretty confident about Sprint ramping up. Admitted that it has gone a bit slower and there were some ‘learnings’ along the way. A little defensive but I liked the guys.” 

“Risk reward seems good here…”

That came to me from a Wall Street veteran who had a one-on-one meeting with SMSI’s management team in NYC this week.

I’ve received several emails, providing feedback and requesting my analysis. Also, Geoinvesting, a well-regarded stock research service visited with SMSI management. In this morning’s newsletter to subscribers, they suggested that an update will be forthcoming. Considering the info I’ve gathered from other attendees, I anticipate an upbeat write-up.

FYI, SMSI gave its standard investor presentation at 12:30PM ET on Monday. Since then, they have been conducting one-on-one meetings, continuing through later today.

The stock has provided an interesting lesson in trading this week.

First, it reacted negatively on Monday. The action sniffed of retail panic. Retail traders can be funny. Expecting professional investors to jump on SMSI within hours of making a standard presentation is silly. Professionals need to digest the presentation, run the math, and do follow-up Q&A with management (among other things).

Sure enough, Tuesday’s action saw SMSI recover all of Monday’s losses and more. This was a loss for nervous investors who sold out, but a win for those with more patience. Of course, two days is not enough time for professional investors to react either. Thus, Tuesday’s action was likely just a snap-back to rectify Monday’s hasty move.

So, what does the chart tell us? A few things…

1. We’re sitting near the bottom of my risk/reward channel.

2. The stock has been consolidating since mid-March (in between the two gray lines)

3. It’s basically stuck between its support level (the lower channel line) and multiple points of resistance (the 50 day moving average, the 200 DMA, and the gap at $2.00 represented by the thick horizontal line).

4. A break above the $2 level should technically signal the beginning of a new bull phase that could take the shares to $4.50.


More Importantly, What Did SMSI Say?

The quote at the beginning of this article sums it up nicely. Things started slower than they expected due to some “learnings” that were required for this roll-out. However, things are now moving along and they are confident about Sprint ramping up.

That’s 100% in line with my impression. They are well past 100,000 downloads (Android + iOS) and Sprint has outlined its ramp-up plans. For example, I’ve heard that their store personnel will be trained on selling the product within weeks and they are hoping to double their installed base within a year.

That would give them an estimated 700,000 customers. For SMSI, that would equate to $28 million in annual revenue, over $19 million in incremental operating profit (per management’s guidance of 70% operating margins). That will drop to the bottom line, thanks to its NOLs, which will “reduce future cash payments for income taxes” according to its recent 10-K filing.

That’s over 75-cents per share.

FYI, according to its 10-K, SMSI had federal and state NOL carryforwards of approximately $151.0 million and $147.8 million, respectively, as of December 31, 2017. In total, SMSI’s deferred income tax assets are valued at $52.9 million, but written down to $0 on SMSI’s balance sheet. So, assuming SMSI can simply start operating a profitable enterprise, its tax assets alone are currently worth more than the company’s market cap… a great hidden asset for a company on the cusp of re-achieving profitability.

Beyond that 75-cents per share, the company plans to divest two of their product lines fairly soon. From what I’ve gathered, these divestitures will make the P&L will look markedly better, raising the upside potential and lowering the downside risk.

So, with an estimated 200,000 total downloads to date, the million dollar question is:

“What are the odds of Sprint kicking Smith out at this stage?”

Based on Sprint’s actions, the download figures, and SMSI management commentary, I believe the answer is close to 0%. If that’s true, then investors should be focused on the fact that Sprint is planning a hard switch-over (completely killing the old product in favor of Smith’s — a.k.a. “sunsetting”) of the entire 300,000-400,000 customer base within weeks.

At that point, SMSI will be earning about $10 per customer per quarter, adding greatly to the revenue they are already earning from the ~200,000 downloads to date (keep in mind, there are an estimated 4 downloads per “customer”, because this is a family-focused product).

That will be enough to deliver positive earnings within a few months, putting SMSI on its way toward the aforementioned 75-cents of EPS. Choose any P/E you like and you can value the company from there.

By the way, some investors are concerned that Sprint is its only major customer (it has many smaller engagements). That’s accurate, but has been the case from day one. The Sprint deal is intentionally the only major customer right now. SMSI management is using this engagement to perfect the product and roll-out process.

The company has other deals queued up around the world (including a potential monster in Europe). The pipeline is just waiting for that process to be solidified (and then, for SMSI to shift its bandwidth/attention from rolling out Sprint to rolling out others).

I’ll have more on SMSI’s trip before the weekend. Stay tuned.

Facebook (FB) Rebounds On Mark Zuckerberg Testimony: This week, Zuck is in Washington to answer questions on Capital Hill. Investors were obvious satisfied with yesterday’s results. The stock had its best day since November and hit its highest level since March 22.

Despite that, the stock remains 15% off of its high. Assuming that new rules, policies, and/or regulations cut into FB’s earnings potential, the discount may be warranted. However, either way, I don’t see it hindering FB’s growth from whatever its new level of potential might be.

Therefore, I expect the stock to find a new “fair value” level (which may be around these levels) and then continue its growth/appreciation from there. The saga isn’t over yet, but the penalty for its stock may have already been served.

FYI, part of yesterday’s testimony involved child protection & social media addiction. This feeds right into the heart of Smith Micro’s (SMSI) SafePath / Safe & Found application. Just a data point for consideration.


RADCOM (RDCM) Gets A Positive Write-Up: A new article outlines the case that RDCM is being primed for acquisition.


MoviePass (HMNY) Expecting To Buy 20% Of All Movie Tickets By Year-End? This stat came straight from Ted Farnsworth this week. Ordinarily, this would impact my cash burn and dilution forecasts (for the second time in two weeks). However, I strongly suspect that a meaningful portion of that 20% is expected to come via its Moviefone acquisition.

Otherwise, the 20% figure implies that its expected 6 million subscribers will go to an average of 6 movies in December. Not even a heavily-invested bear would believe that. Accordingly, I’m not altering my model to reflect Ted’s latest comments.

As a reminder, my publicly-available model is not based on my thoughts and/or opinions! It’s largely based on information I’ve gleaned from directly from management’s (Mitch & Ted) public interviews, industry sources (like the MPAA and BoxOfficeMojo), and the bullish analysts’ reports.

To account for any inconsistencies between what Mitch says and what Ted says, I’m now maintaining two separate tabs in the model. The official model is the Mitch model. For now, I have incorporated the 20% figure into the Ted model, just so folks could see that it makes no sense (and therefore warrants no additional panic or concern).

My cash burn estimate remains fixed at $700 million for 2018. Barring a substantial change to their pricing/service model, I estimate they will need $600M in new funding before year-end.

For the record, I don’t think that is going to happen. I believe they will choose (or be forced) to make a strategic move before then. I have doubts that the public markets will give them another $600 million this year under any terms. I’ll explain why in a moment.

At this point, I suspect that their most-likely move will be to push for subscriber critical mass through the fall and then put its first usage limit in place. That would explain the decision to stop offering annual memberships. Under the monthly plan, it will be much easier to institute a usage limit. Under an annual plan, heavy users could rest assured that they can attend movies with no limits for the next 12 months.

I see no other reason to stop offering the annual plan. It was bringing in much-needed up-front cash, delaying the next round of funding.

In other words, there are/were pros and cons to the annual plan… with the main con being an inability to change the rules.

Speaking of the next round of funding…

Barring a major change to their operations, savvy investors (and anyone consulting my model) can conclude that yet another $100 million will be needed very soon after the upcoming round. Yes, I believe that two rounds will be needed in the next three months.

Short interest has more than doubled since year-end and currently sits at record levels. I believe that many investors have been shorting the stock in anticipation of (and the intent of participating in) the next round of funding. Basically, if you short the stock at $3.00 and participate in the round at $2.50, your participation effectively covers your short with an easy and instantaneous $0.50 per share profit.

That being said, short interest, despite being a record 11 million shares, only represents about one-fourth of the 40 million shares (at $2.50) that I estimate will be required to raise their next $100 million (because a 35% discount has characterized their last two rounds).

I’ve rarely seen a round like that, so I don’t know if enough investors will participate to represent 40 million shares, especially if many of them are in it for the quick flip, as the trading action implied after the last two rounds.

No matter what, they’re pushing the limits of conventional funding. We’re about to find out if the limits can be pushed further…

… and even if they can, it will only be enough to fund them through June. Another round will be needed a month later.

One Final Data Point

I think it’s good that MoviePass continues to sign new exhibitors. However, everything is about context. Data points are not supposed to be equally weighted. To illustrate this, just look at the market share numbers below.

Note that the Big 3 dominate, with about 50% of all screens in the U.S./Canada. In other words, MoviePass can sign literally hundreds of deals and still not gain 50% share, which I believe to be a critical step for them to achieve profitability.

We need to see them land members of this Top Ten list:

Theater Market Shares

Source: Statista

Landing chains like Landmark is not a big deal, no matter who is quoted in the press release. They can’t generate meaningful exhibitor revenue unless the Big 3 cave in… and as I’ve said many times before, they like the benefits of MoviePass, but not if it means giving up their strategic position in the industry… and that’s exactly what MoviePass is trying to do.

This is why AMC won’t even come to the negotiating table.

While the monetary benefits are nice, they would rather see MoviePass die than give up any of their strategic industry power. Business Strategy 101 dictates that the Big 3 utilize a “starve them out” strategy. If they stand together (without risking the appearance of illegal collusion) and refuse to deal with MoviePass, they can force MoviePass to continue raising money until they either achieve critical mass or die trying.

Either way, the big chains benefit (for now). Either MoviePass goes away or they get to enjoy the free benefits until its 100% clear that they have to negotiate.

The next round of funding should tell us a lot about how this battle is going to end.


Citron Provides Another Short Idea

Citron Research has released a short thesis entitled “Hailiang Education: China Hustle Déjà Vu“. In it, they compare Hailiang (HLG) to Longfin (LFIN), a stock which I shorted in my personal account. They also negatively compare HLG’s underwriter to Maxim (one of HMNY’s underwriters). Just some FYIs for you.



More Research:


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Disclosures / Disclaimers: I am long SMSI, FB, and RDCM. I have no position in HMNY or HLG, but may do so in the future. That being said, this is not a solicitation to buy, sell, or otherwise transact any stock or its derivatives. Nor should it be construed as an endorsement of any particular investment or opinion of the stock’s current or future price. To be clear, I do not encourage or recommend for anyone to follow my lead on this or any other stocks, since I may enter, exit, or reverse a position at any time without notice, regardless of the facts or perceived implications of this article.

I am not a financial advisor. Nor am I providing any recommendations, price targets, or opinions about valuation regarding the companies discussed herein. Any disclosures regarding my holdings are true as of the time this article is written, but subject change without notice. I frequently trade my positions, often on an intraday basis. Thus, it is possible that I might be buying and/or selling the securities mentioned herein and/or its derivative at any time, regardless of (and possibly contrary to) the content of this article.

I undertake no responsibility to update my disclosures and they may therefore be inaccurate thereafter.  Likewise, any opinions are as of the date of publication, and are subject to change without notice and may not be updated. I believe that the sources of information I use are accurate but there can be no assurance that they are. All investments carry the risk of loss and the securities mentioned herein may entail a high level of risk. Investors considering an investment should perform their own research and consult with a qualified investment professional.

I wrote this article myself, and it expresses my own opinions. I am receiving no compensation for it, nor do I have a business relationship with any company whose stock is mentioned in this article. The information in this article is for informational purposes only and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

The primary purpose of this blog/forum is to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.


124 thoughts on “Stock Updates: SMSI Visits NYC (Plus, $FB $RDCM $HMNY $HLG)

    1. IMHO, no way. When he comes to financing, I think they are on their own. And example of a strategic move would be to put a limit on how many movies a subscriber can see per month.


    1. I think the big studios see them as one of many viable advertising mediums, albeit at a relatively small one if you do your research on the industry advertising dynamics.

      I think the smaller studios see them as more of a strategic partner that can drive moviegoers to see their movies. However, that’s a double edged sword for MoviePass. Even if a studio gives them five dollars per ticket, moviepass is still paying $10 to entice its customers to go to more of these small budget movies.

      As we have seen thus far, nothing is stopping moviegoers from going to the blockbusters.

      This means that utilization may remain high and also that the big studios have no strategic need for moviepass.


  1. “For the record, I don’t think that is going to happen. I believe they will choose (or be forced) to make a strategic move before then.”

    We finally agree!

    Liked by 1 person

  2. I’m hoping they may be able to avoid an immediate need for cash per your estimates, for the following reasons 1) there were a few different iterations of the annual plan in place from February 9th – early April. With that said, they should have raised ~ $50mm plus through this. 2) They have many more distributor & studio deals in place, 3) As mentioned they have added more small exhibitors while providing e-ticketing & “inventory management” to many of those theaters to steer traffic to the ones they receive discounts from, 4) American Animals comes out on 6/1/18 and by then MP will reach a targeted audience of ~ 10mm on their own through MoviePass & MovieFone, not to mention if the film gets traction outside of their own efforts, it could generate a lot of revenue (plus add-ons from streaming licenses, DVD sales, etc), 5) Helios raised ~ $105mm in February and only sent over a portion of those proceeds to MoviePass – and while I know Helios has operating expenses of their own, they should still have money in the bank from that offering that they could send to MoviePass if/when it’s needed (Mark do u have a guesstimate as to how much Helios still might have on hand from what they didn’t send to MP?). 6) Inventory management – Mitch talks a lot about this one, and I believe they will use it wisely to help stem cash-burn through possibly limiting Blockbuster movie tickets (Avengers, Solo) that would otherwise be available during prime viewing time such as weekends & after-work hours, etc. Also, fortunately there has also been a lot of pr-sale tickets for Avengers which removes some pressure from MP as many people have chosen to pay up via Fandango to lock in a ticket for opening weekend!


    1. You guys are all barking up the wrong tree. This all comes down to the politics of proxy… Ted’s desire to own 100% of MoviePass, MP’s desire to do an IPO… MP’s inability to raise funds due to non-dilute, MP investor and prospective MP investor NDA’s which blocks them from trading HMNY, and Ted’s comp package. These are all of the key data points which will determine how and when MP will get funded. Sorry it has nothing to do with the business model.

      May write up something on this soon and uncover the inner workings and internal politics of what is going on soon. That’s the real story. It’s a fascinating one for sure.

      Liked by 1 person

      1. Ben,

        Although I don’t have contact with Ted, I disagree that he wants to own 100% versus MP desiring to IPO. It was in the initial agreement for a reason, both parties agreed that MP would IPO by 1/31/18, then 3/31/18, and now some filings suggest 6/1/18. I think this is still the plan. As Mark mentions, it would be very difficult for HMNY to raise capital at the current stock price. No one is going to go for a PO after ER if the stock shoots up, just as they didn’t when you asked Ted about doing a raise with the stock shot to $38.

        I think Ted is done buying MP shares, with HMNY owning 81.2%. This number is significant, it is just over the 80% threshold needed for a spinoff to be tax free, giving some leeway for the unexercised warrants in MP. Interesting to read the filing on the Subscription Agreement where HMNY paid for shares, then were given shares to get to that threshold.

        Section 355 of the Internal Revenue Code.


        1. I could always be wrong but my thesis must be based on where the evidence leads me. Based on the many discussions I’ve had with various stake-holders in both entities, this is the opinion I must have. There is alot more I prefer not to say here and hope to write about soon. But in short, let me just say… you need to understand that HMNY and MP are NOT the same company and they have COMPETING interests… AND they hate each other on many levels… well more like MP stakeholders hate HMNY. There is a very real war going on behind the scenes and ultimately the share price is not indicative of the actual value of the company because there is not efficient price discovery now due to some of the dynamics I mentioned above. There is a ton of interest in investing privately in MP and all that interest means HMNY cannot be purchased on the open market and MP investors will NOT purchase MP either due to non-dilute? This is all being driven by Ted’s desire to buy up as much MP as possible. He may realize he cannot dilute his stock further and may take actions which free up the market and ultimately facilitate an IPO but his desire 100% is to own all of MoviePass if he could.

          I’ve said enough here. More in another forum perhaps.


          1. Ben,

            So the deep-pocketed investor who stands behind MP to reach breakeven which Mitch always talks about – you think he is referencing somebody other than Helios & Matheson? If so, who would it be??


          2. Then, I hope you understand that I agree with all of this, except about the part about what MoviePass is worth.

            Later this year, I may be inclined to change my stance. However, the facts that you have astutely pointed out create a financing dilemma for the company, which Absolutely 100% Has To Be Factored into the Valuation of the Company!

            If you haven’t run the numbers on how much financing they need and how many shares will be outstanding as a result, and you have no way of knowing whether the stock is overvalued or undervalued at present levels.

            Sure, it’s POSSIBLE that this could become a company worth $10 billion, but if it requires 10 billion shares to do it, common shareholders will lose 66% of their value from these levels.

            People can say that’s hyperbole, but I don’t think anyone expected the diluted share account to go from less than 10 million to 100 million in a few months time. It’s not hyperbole. It’s reality in the making.


          3. p.s. Many of your data points are quite additive to what has been covered here.

            I want it to be clear that I view you as one of the top three data gatherers on this story.


          4. I agree with all of that Mark. The only thing I disagree with is that valuations of secondaries MUST be low simply because their “math” has not been proven yet. I completely reject this. It is possible for the company to raise money on GOOD terms and MUCH higher valuations if they did not have these financing dilemmas and they were able to tell a good story to investors with just ONE financing vehicle available to them. It’s important to correctly identify the problem so you can jump in at the right time. The math problem won’t be solved for years which means it makes no sense to be long or even think about going long this year. HOWEVER – if the real problem is proxy – then it bears watching this very closely so you can increase your position or start a new one when proxy is solved. I have to do more research on the non-dilute but I believe it had a one year expiration. If that is accurate, then I believe we may see some interesting things happening after August 15th. We also have to watch carefully for the possibility that Ted will waive the non-dilute prior to expiration. This may be a little something lost in an SEC filing but would signal a buying opp. I stand behind my thesis that the share price is not reflective about doubt in the business model and the share price is not a reflection of the true value of the company. This happens with proxies all the time. It’s not correct to dismiss it. We can agree to disagree on this point but we pretty much agree on everything else.


          5. I can go along with that.

            For the record, I don’t dismiss the implications of the proxy. It’s one of many things at work… but just one.

            I agree (as I have from the beginning) that the business model can work. The math bears that out.

            However, the math also shows that the trajectory of progress has not been what was originally promised. As a result, the funding expectations had to be reset, creating the dilution concern (especially in light of the anti-dilute).

            This is why the math matters. If anyone says that the current math invalidates the model, I will join you in disagreeing. I have invested in many subscription / profit-in-the-future businesses and each of them require foresight… but also oversight.

            Cheers and much respect Ben.


          6. Dear anonymous,

            I initially thought the “deep pocketed investor” was a cynical way of referring to HMNY shareholders but after recent conversations I’ve had with MoviePass stakeholders, I am no longer sure about that. It appears there may be a ton of pent up demand for MP stock which is simply not being deployed due to the anti-dilute clause.



      2. Ummm… yes, that’s a PART of the story (which I covered long ago). In fact, I was the one uncovered the true nature of the anti-dilute, along with the probable implications of Ted’s comp plan (which has, to this point, been proven 100% correct — acquisitions and capital raises, increasing the market cap to his benefit, but lowering the share price to shareholders’ detriment). I turned very bearish on that announcement and the stock is down 75%+ since.

        You are correct on many points, but continue to ignore the operating structure impact on their funding requirements… along with the dynamics of those funding rounds. This is why so many investors have taken the unfortunate ride from the double digits down to three dollars. I lent my expertise to this and have been right… 3 to 30+ long, 30 to 20 neutral, 20 to 12 slightly optimistic, 12 to 3 bearish… not because I’m smart, but because I’m following the simply principles of Investing 101, which professional investors all understand.

        BOTTOM LINE: Your beliefs are a PART of what created the funding dynamics that exist. In other words, you are correct, but ignoring the implications of your correctness!

        You seem to think that long-held principles don’t apply to MoviePass, as if this is the first story like this. Either that, or you refuse to acknowledge that they exist in the first place 😂 No skin off of my back 😊 I’m not here to debate, I’m here to collaborate. As a result, the research here is the most comprehensive (and unbiased) available and my readership is at an all-time high (well over 10,000 and counting.

        But free to continue ignoring the data points that are convenient to ignore. When you’re ready to pay heed to the WHOLE story, I’ll be here. 😇

        Kindest Regards

        p.s. even if your story was the whole story, I don’t know why anyone would suffer the consequences of being a common shareholder under those dynamics. Your story is more than enough to keep professional investors away. So, why should retail investors suffer 75%+ losses when they can just jump in if/when the company reaches an inflection point (at a much lower price than the double digits it fetched before these hyper-dilutive rounds started)? That’s idealistic, not capitalistic. 🤷🏻‍♂️


        1. If I were aware of all of these dynamics months ago, I would not have invested. However, I don’t think now is the time to sell. If I were not in, I would wait for better clarity on resolution of these issues to start a position.

          Liked by 1 person

          1. I do agree that the proxy is more of an issue than in other cases (i.e. EMC/VMW), mainly because of the anti-dilute issue. We seem to agree that $1 billion of total funding is needed to see if MP can reach the promised land (you say yes — I say IDK)… either way, they’ve only burned $100-200M, so it’s easy to envision how much dilution HMNY will incur on the next $800M if they let the anti-dilute go.

            I should have explained this particular angle when I first discussed the anti-dilute and Ted’s comp package. 🤔


    2. All of this has been covered in my writing and my model. So, I don’t understand why you are using “hope” when the data is there at your disposal.

      The annual plan numbers are incorporated into my model per management comments. The distributor in studio deals are incorporated into my model per management comments and the bullish sell-side analysts. American animals will not be out in time to provide cash flow to the company before it needs another round of funding. Etc. etc. etc.

      They need money and they need it soon.


      1. 1) Your 3/22 model only adds up to $440mm in Revenue, Ted said he expects $500mm – $600mm.
        2) Your model doesn’t state the amount of cash Helios has left over from the $105mm February capital raise, as they only sent a portion of that to MP
        3) I don’t believe your model accounts for “inventory management” which I believe will reduce their cash burn (vs your high forecasts) during the peak summer May/June/July period
        4) American Animals comes out on June 1st in the middle of peak season not to mention, Star Wars Solo will have only been out for 1 week before this

        Liked by 1 person

        1. GREAT points.

          1) I’ll examine that and consider whether Moviefone and other things have an impact. However, the numbers are built on what THEY have said, (number of subs x price + ancillary revenue = total revenue), not my guess. Again, I’ll examine the discrepancy. It wouldn’t be the first discrepancy I have found in what they have said.

          2. I conservatively assumed that MoviePass gets the whole $100 million before requiring more funding. I actually think the reality is worse, which is why the MP/HMNY/Funding rumblings have been ominously growing in recent weeks.

          3. Correct. Until management makes a hard move or statement of intent, it’s not incumbent on me to make assumptions. My analysis is based on data and I’m doing my best to remain 100% impartial in that regard.

          4. I recommend that you investigate how the cash flow dynamics work with a movie and its participants. I don’t see AA assisting HMNY until long after one (if not two) rounds are needed.

          I would also investigate how many theaters are going to show it. I could be wrong, but predict limited participation on the part of the major theaters.


  3. 7) and yes, you know I already mentioned in a prior chain that limiting tickets on heavy users is the quickest, easiest, and most impactful way to immediately halt cash burn. 8) And lets not forget, they can always raise prices too!


    1. THIS is true, but not without implications, otherwise they’d have done it already.

      The bottom line is that they need a lot more cash to get to the point they are hoping to reach.


  4. Did you see this article from yesterday?

    Particularly interesting was the bit about AMC

    We found some really fascinating things. One is that, well more than half of our subscribers have found a competitor to go to. They didn’t change their frequency habit. They found an independent or Regal. In fact, we had many theater owners saying, “Please shut off the AMC near me.” Some theaters saw a doubling of business in the surrounding area. The second thing we found was the AMC theaters actually decreased their volume during this period by double what we were spending there. And it was because 60 percent of [our subscribers] go with a non-MoviePass friend, and [the subscribers] were the ones that had [a ticket] for free, so they were driving wherever their friend would go. AMC, according to market share reports that we had access to, declined — most of them, not all — double of what we were spending. We tested this, we learned a lot, and then the test was over, so we turned them back on.


    1. Yup! … and still, we are hearing nothing about the big three caving in. AMC isn’t even negotiating. That’s what I am waiting to see. If they land deals with the big three, it changes everything… and I will be happy to cover the event. 👍🏼

      Until then, they will continue burning cash and needing dilutive rounds of funding.


      1. If AMC was going to do a deal, they could never accept the public image being “caving to moviepass after turning off 10 locations”. If they were negotiating it would be absolutely top secret and a deal would be done in a way to premote AMC. The fact that Ted pivoted so hard from “was consodering turning off all AMC” to admitally stating “just part of testing project” seems suspect to me. Ted and Mitch would and could have jumped at the opportunity to pump stock, but instead down played.

        Liked by 3 people

        1. I have mused over what the motivation would be to add those locations back. My thoughts go something like this: You already blocked them. There is no signs of any significant customer backlash over it. You have no discussions going with AMC. You lift the block anyway. Why? I can’t make sense of it. Their BS line about testing is just that….. BS. The fact that they even tried to claim that as the reason after the very public statements they made at the time they blocked the theaters is troubling to say the least. The only thing that does make sense to me is a reason related to a deal or pending deal with AMC. Yet, every bone in my body says there is no way in hell that AMC has agreed to talk with MP. So I guess I am saying that move to unblock confuses me.

          Liked by 1 person

          1. RIGHT? !!!

            My thought was this — if the chain (AMC in this case) won’t negotiate and customers simply go elsewhere, MP gains no benefit. In fact, they penalize their customers and therefore themselves.

            If they keep AMC turned off, other non-negotiators make more money at the expense of the customers’ inconvenience. So, it just makes more sense to keep the customers happy by keeping everyone turned on while you try to negotiate a deal (which I’ve long-said will likely have to be an exclusive… which won’t provide enough revenue to drive profitability).

            Liked by 1 person

  5. Forgive me if this has already been discussed, but the big 3 having 50% of market share, doesn’t guarantee it to be so in the future. MVP will slowly erode their market dominance imo, with e-ticketing, having events a co-partner theaters, and creating an ecosystem which customers appreciate and will be loyal to.


    1. I’ve played with the numbers. I recommend that you take a look at the estimated number of partnerships they have and take a crack at estimating how much they can really move the market share needle (taking into consideration that it’s not solely about market share, but the absolute market size… and the difference between getting a cut of a fixed number of visits versus stimulating more visits). Cheers.


        1. More like 7%, but yes. The question is, how much influence do they have over those tickets? What percent of those tickets can they divert to other theaters without losing customers? What percent of them can they divert to other movies?

          From what I’ve observed to date, they don’t have much impact on the big movies and certainly represent a large share of the smaller ones. However, those frequent visits come from frequent moviegoers who tend to go to smaller ones as well as the larger ones.

          Lots to consider there.


    2. The independent chains don’t have enough theaters/screens in order to support any kind of major Big 3 erosion. Moviegoers will only travel just so far to see a movie. Remember they only blocked 10 theaters in different markets. No big deal finding a closer one in this situation. If MP starts blocking big blocks of theaters in the same mkt, people will stop going to the movies and it will backfire on MP.

      Liked by 1 person

        1. They don’t have to erode all 3, they have to erode 1. I don’t think they are foolish enough to block multiple different chains in the same city.


          1. Agreed, but they HAVE TO sign at least one of them. If none of them cave, it doesn’t matter who you block because customers will just go to one of the other ones (or quit the service).


      1. In some markets, say in the middle of Kansas the next choice theater could be 40 miles away. Blocking an entire chain like AMC could cause a lot of damage to the subscriber base. Nobody will drive the 40 miles if your favorite AMC gets blocked.

        Interesting stuff to analyse.


        1. I doubt they block an entire chain in that fashion. It would only be a theater that has a competitor close by to not lose subscribers. I am in the Atlanta suburbs and blocking AMCs here would hit AMC’s bottom line hard, while there are plenty of competitors (and MP partner) theaters close by to divert subs.

          Liked by 2 people

  6. Mark why do you have their total other revenue at 2 million annually, even with a sub count of 5-6 million? They place targeted ads for various products in emails already let alone the ad movie ad revenue savings they offer at 10% of overall tickets purchased. I have seen the domestic movie ad spend estimated at 3 bil annually, why isn’t MVP due 10% of that at this point? Thanks


    1. Not to mention, Mitch recently mentioned the movie Gringo by Amazon Studios was a key & first of a kind studio partnership for MP and it drove 28% of its sales too!


      1. You’re very enthusiastic. Your data point gathering has the hallmarks of a potentially good analyst. However, you have to learn how to put things in perspective instead of just throwing data points against the wall. It creates a slight air of desperation, which is the opposite of your aim.

        Just an honest outside assessment from someone who admires your diligence. Cheers.


    2. I’ve covered that in a previous post. I researched the value of an ad and calculated how many ads the average MP customer sees.

      If you’re a MP customer, think about how many ads you see there. Then, apply your choice of $$ per ad (as long as you stay within industry standards). For example, the average ad gets about $2.50 per ONE THOUSAND impressions. Facebook gets something closer to $7.00 (again, for a thousand impressions).

      You need TONS of volume to make real money and the MP app doesn’t do that. We spend 5 minutes in the app a couple times per month (versus apps like Instagram where some people spend over an hour per day).

      This is why I preach the concept of doing research and analysis. Collecting data points is useless if you can’t calculate the value of each data point.

      EXAMPLE — How many theaters does Landmark have? Most people don’t know (even though it was in the press release) and certainly don’t know what that represents as a percent of the total screens in America. So, NONE of those people know how big the news was.

      Hint — Landmark has less than 1% market share of US screens.

      However, the bulls jumped all over it without a thought. Why? Because M.Cuban gave a quote?

      We don’t even know if they’re give MP a cut or if the’re just integrating with their back-end system. Either way, the business is too small to move the needle whatsoever.

      This is what separates investors who can outperform the market by a wide margin from those who can’t. I averaged 40% for the 13 years leading up to my retirement. I’m not a genius. I just do the extra work to properly weight on each data point.

      Those who don’t do the extra work still make money — the market goes up, so almost EVERYONE makes money. However, you can’t get AHEAD if you’re not making MORE than everyone else ;^)



    1. I understand that… but your enthusiasm requires your data points to be accumulated, weighted, and analyzed as a whole. Otherwise, you’re creating a confirmation bias trap.

      I’m not saying that you’re wrong to like MP. I’m just saying that your approach won’t serve you effectively.

      The reason I was able to call HMNY on the way up and down is the accumulation and analysis of data points. When the analysis said “be bullish” I was bullish. When the accumulated evidence said to turn bearish, I did.

      HMNY is one of the easiest company I’ve ever had to analyze thanks to the frequent data points management provides in public.

      I only remember having an easier time with Ebay (before they changed their URL scheme, I was able to calculate their revenues with effective precision) and an old video game company that used to provide first-month sales numbers (which were easy to extrapolate and roll up into quarterly figures).

      Have to learn the tricks and take advantage. Not everyone can become a millionaire. Gotta separate yourself from everyone else ;^)


  7. I already made my nest egg buying Sirius XM in the dark days of 2009 when they were on the brink of bankruptcy and bailed out by John Malone. I like buying when others are fearful when I believe in the product and/or model. Not to mention I’ve only recently invested in HMNY and am comfortable buying in the $2.50 – $3.50 range as I never participated in the stocks initial meteoric rise & fall.


    1. Nice! Awesome story of guts turned to riches. I don’t have that level of courage. I’ve always been totally dependent on my analytical skills to offset my cowardice. LOL.

      Now imagine combining your guts with a layer of analysis. You’d hit find more SIRIs and avoid more losers (whatever losers you may have found along the way). That’s what separated Buffett and others from the rest of us.

      The funny thing is that you have more potential than I do. My skills can be learned, but courage can not 🤔😉😭


  8. I’ll be very curious to see the day & what moves your analysis to the bull camp, as you provide an excellent cross check! Separately, while we wait for Mitch/Ted to right the business model for the long haul, there’s also another trade within there, as the moment these guys put a limit on the excessive users, there would be an epic short squeeze!


    1. As they can impose a limit on a whim, it’s 100% a decision of their own with no dependency/approval from the studios, distributors, or exhibitors required! That’s the trade within the trade whereas the long-term MP plan requires a lot of negotiation with many different parties to best optimize the entire business model.


    2. I can’t disagree. If I thought the stock could hold its ground, I’d be in it for that alone. Alas…

      BTW, “…what moves me BACK into the bull camp”. Been so long that people forget that I was one of the original bulls 😂

      Liked by 1 person

      1. Here’s your bull thesis. Give me a little critical feedback if you would.
        1. Ted lifts the anti-dilute. MP IPO’s at 1 billion valuation.
        2. That IPO dilutes HMNY to 25% ownership of MP and HMNY no longer has to finance/dilute for MP.
        3. MP now has the capital to carry it to 20 million subs and a 10 billion valuation by end of 2019.
        4. HMNY shares increase from $3 to $30 (10x) as it becomes obvious that MP will get to 10 billion in value without having to further dilute.
        5. Consider it could be a little better than that since HMNY owns MF and MPV and maybe Ted strikes a little better deal than 25% on a rewrite of the anti-dilute cause allowing them to IPO.


        1. To be 100% honest, this is not good, from start to finish.

          1. $1B valuation is it justified at this time.

          2. Dilution to 25% ownership implies well over $500M in IPO proceeds. Outlandish.

          3/4/5 etc etc etc


          1. Right, but couldn’t the valuation and proceeds could be less now and build to those numbers on a few secondary offerings as they continue to grow the business?


          2. Sure, but all of that is too far in the future to predict with enough certainty to call a “bull thesis”. Predicting a $1B valuation without quantitative justification is called “hope”.

            We have to work with what our eyes see. We can see what their strategy is and we can see what the numbers are so far. So, we can see how they are progressing towards their strategic goals.

            That is what the Bull & Bear theses need to be based around.

            BTW, I’m not sure if I’ve ever made this point, but the company has NEVER sustained a profitable subscriber base at ANY price point. Customers have always demanded an obvious value.

            Remember, moviegoers can buy tickets at 25% off from Costco, so why would they buy a MoviePass unless they can go a minimum of 16x per year (at $10, that’s a 25% discount relative to the subscription price). That’s a minimum of 1.33 movies per month to seem like a bargain.

            With subscriber breakeven being a key part of their thesis, I wonder what makes them think they can get there with the least profitable price point they’ve ever offered…

            …and the answer isn’t getting 20% from the theaters. That revenue is supposed to be part of their profit (post-breakeven), not how they get to breakeven.

            Not to mention, they will never get 100% penetration of the theaters, a contrast to the profit Costco makes on 100% of the tickets they sell, if you understand my point relative to MoviePass’ installed base and utilization.


          3. I am predicting a 1 billion valuation with 5 million subs and 10 billion with 20 million subs and that is easy to justify mathematically. Not hope. You can believe the usage will remain too high to make this happen. Fair enough.

            Your point that they have never made a profit is irrelevant since the business model has been completely changed since then. Further your point about Costco’s discount……… “Why would they buy a MoviePass”……….. Well 3 million already have and the official company projection is 6 million by end of year. I guess you are trying to “prove” the usage will stay too high. Well that is definitely the 64 million dollar question.


          4. “that they have never made a profit” has NEVER been a part of my thesis. I’ve been researching it investing in subscription technology companies for over 20 years. I understand the concept of building critical mass. I was fine with their losses when I was bullish and I’m fine with them now.

            What I am not fine with is the progress of the operating model and their journey to critical mass. It doesn’t matter how many millions of subscribers they have… what matters is the utilization rate… and so far, that utilization rate has not come down to the extent that Management guided six months ago. Not even close. That’s a about as big a problem as the dilution, because that issue has impacted professional investors’ confidence in the model… and therefore their valuation.

            This is a stark contrast to NFLX, WDAY, and especially GAIA, where the math of the business model is mapping EXTREMELY well to Mgt guidance and what’s needed to drive sufficient future profitability to justify the current valuation.

            Almost everyone is talking about valuation as if they have not yet done a DCF analysis on this company. That’s like playing poker without any kings or aces.

            You HAVE TO do a DCF, especially on a subscription company whose profitability is expected sometime in the future.

            This is why the pros got out and the retail investors don’t know the right price at which to buy. 🤷🏻‍♂️🤦🏻‍♂️😓


          5. To be clear, I’m not trying to prove that it will stay high. I’m simply hypothesizing based on the evidence that we have observed to this point.

            Nor am I trying to prove that utilization is presently too high. It IS too high. Already proven because management provided guidance on how utilization should look on month over month basis many months ago. In fact they provided me with a detailed figures down to the decimal point. That enabled me to build the cohort analysis I shared to track their progress… and they have yet to even come close in any single month.

            That’s not an attempt at proof. That is proof. Until that issue is reconciled, the model they presented to me, investors, and Canaccord/Maxim, is not working. Not working is the definition of “broken”. 😓


          6. Well, the past and current numbers are not, because they’re calculated per management’s public statements.

            As for the forecasted numbers, I agree! However, those are NOT my numbers. Those are based on Management’s expectations of tickets purchased and total number of subscribers.

            Just do the math and see for yourself!

            Personally I think the numbers will come in lower, but implies that Management doesn’t have a handle on their numbers.


      1. Another nugget. Ted said we can generate $6 in ancillary revenue “right now”. He fails to mention how long it will take to ramp up to that number.


  9. Oh and I have been meaning to touch on SMSI. Any concern about the recent push for the Sprint – T-Mobile merger to wrap up delaying the rollout of safe and found?


  10. The prospect of them adding utilization limits is certainly bullish, but even that prospect is nowhere near enough for me to see them through to profitability, due to the point I made about customers requiring a bargain (per MP’s long history of unprofitable operations at any price).

    The ancillary revenues just don’t add up. Theater and studio kickbacks are the biggest pieces IMHO. But they will never achieve close to 100% penetration of either because 1) The big three theaters probably won’t cave without an exclusive, which means MP will not be able to sign two out of the three and 2) There are about a dozen $200+ million blockbusters each year, which puts a floor under their utilization rate.

    I’m their dream user (among people who would actually pay for the service). I pretty much only see blockbusters (can’t be bothered with movies I can enjoy at home), but that’s still at least 12 per year… and I’m the low end user.


  11. “Inventory Management” is just a tool to slow down some of the cash burn until they can either 1) raise capital at a more attractive rate, 2) be in a better position (near 5mm – 10mm users) so they can clamp down on excessive users, 3) resolve the proxy issue/MP spinoff, IPO, or Reverse Merger, 4) Finalize the Red Zone spin off (if that one even happens in the first place or can even add any value other than taking those expenses off Helios books). I know many predict an immediate cash raise and the only point I’m making is that “Inventory Management” will buy them a bit of extra time to figure out the immediate next step of this much longer journey…


    1. We all know that already. The point is, they haven’t exercised inventory management to meaningful degree yet BECAUSE THEY CAN’T.

      It’s interesting, because these discussions have actually made me more bearish over the last couple of days. The bull arguments are not evolving, nor are the existing arguments manifesting in the real world.

      The prospect of inventory management is bullish, but it’s ONLY prospect at this point. Dilution is a more predictable, immanent, and powerful catalyst.

      As I think through the mechanism of inventory management and why they haven’t done it, I’m left increasingly bearish.

      May be time for a pre-gauntlet, pre-funding, no-inventory-management-yet, no-AMC-negotiations update. 🤔😓


  12. Ha! In the meantime, are u gonna put together on update using Ted’s newer quote of $500 – $600mm revenue and also while your cash need model assumed the use of the entire $105mm Feb capital raise, have you been able to reverse engineer how much of that capital raise is still on the books of Helios as they only fronted a portion of it to MP so far.


    1. Correct… IF I can figure out how they plan to make $500-$600 million within the context of what they’ve told us so far.

      Ted’s data points don’t match up.

      They rarely have. He is a genius at PR, but he is horrible with numbers.


    1. I offered to help and it was discussed. Ted came to where I live and we had breakfast across the street.

      He joked about how analytical I am (wonder why 😂) but I refuse to do official work or get paid for anything anymore. I like to come and go as I please. No obligations. Freedom! 😊


  13. Also, can you take a shot on the 2nd half of my question as to the amount of cash left on Helios books based on the Feb capital raise and what they fronted to MP so far, and for arguments sake also how much cash you think MP has now too after 2 months of selling different annual subscriptions. In total there should be a decent amount of cash


    1. Yep… but would be nice if one you guys gave it a shot. I’ve been doing a lot 😉

      I’ve said this to Ben, but it applies to everyone here. Becoming a better investor involves learning how to understand the operating/cohort/DCF models. I’ve built AND SHARED the operating model and the cohort analysis.

      All you guys have to do them to gain greater understanding of how the business works, is LOOK AT THEM until you understand them! That will arm you to better debate the topic.

      Over the last week or so the debating points have become very weak relative to those models (which are built on everything that Management has said, along with factual industry data and input from the bullish sell side analysts).

      Anyone’s arguments have to make sense relative to those models to be valid.

      Trust me, I WANT to become bullish (again). I’m not shorting the stock, so the only way I’m making money is if the story turns positive. That is something I am eagerly looking out for.

      That should tell you something. 😉


  14. For me, I was just trying to funnel out the difference between your expected timing for the next capital raise verse my own estimates – as I still see a few areas that need adjustment in your model. Our difference is probably in the magnitude of 2 – 3 months, in which a lot could happen that can move the needle on this stock in either direction.


    1. How’s that? My model operates under the assumption that MoviePass receives the full $100 million. That’s the most conservative assumption that anyone can make, short of things that haven’t been discussed by management.


  15. In general, 1) I believe they have more cash on hand then you project, 2) their revenue is higher from their growing subscribers & other sources combined, 3) American Animals will help (I agree it is a huge unknown on the magnitude of its commercial success but MP will absolutely throw everything it has at promoting it) and again it will be released in the early part of the May/June/July peak demand season with Star Wars solo only out for 1 week before American Animals, 4) Inventory management will be deployed at a higher level than you account for, 5) IF they successfully spin off Red Zone, it will remove some of the cash burn, 6) the possibility of limiting excessive users could be as early as the end of summer – late fall: AGAIN all of this is only to demonstrate I think they have more levers that will allow them to better time/manage the next capital raise in the short term as that is everyones immediate concern – when is the next dilution and at what price / number of shares? Hence, the longer they can postpone the need for an immediate need for capital, the greater the odds of a more successful capital raise as it buys them time to flush out the model and in particular prove to the market if MoviePass Ventures, the addition of MovieFone, etc can be a game changer on their revenue/cost structure (barring some other surprise deal announcement). So again, my whole argument here is ONLY to estimate the timing of the next capital raise.


    1. I don’t know where you or any other investor gets the idea that they can “think” something that isn’t reality.

      If you doubt my model, then you also doubt everything that Management and boxofficeMojo has said. Tickets cost 10 $11, they are buying 6% of all tickets, and they have 2.5M customers. After that, the math is a cakewalk.

      One last time, that model does NOT consist of my numbers. Those numbers belong to Management and boxofficemojo.

      All I did was add subtract multiply and divide. I can’t keep having this discussion. I’m not a tutor. This is for collaboration not a seminar on investing 101. There are plenty of sources for that on the Internet. Cheers.


  16. Again, its just a timing difference between you and I on the next capital raise. However that has huge implications if its done with the stock down here at $2.99 or if they manage the business better than your model predicts which allows the stock to rally and a capital raise is done at a higher price, let alone if can claw its way back over $6.50 so they raise at the warrant price. I’m comfortable buying in the $2.50 – $3.50 zone to take that bet and your bet is to wait out the storm for now. This is not a contest or race. You may be right, I may be right but I’ll bet some money now and bet more later if it goes cheaper!


  17. New MP interview. All data points BEARISH, with the exception of one.

    their statements require a downward adjustment to Cannacord’s model and an upward revision on Ben’s already bearish (for the stock) estimate of how much funding they will need.

    More on this in my next post. This one might have to be a full blown Audiocast.

    I was getting less bearish over the past couple weeks, but that’s officially over with the content of this interview (among other things, including Ben’s revelations about the internal issues). Scary.


      1. Believe it or not, Ben and I agree on most points. He’s run the numbers and he understands how much capital is required. Where we differ is that he feels that they deserve a high valuation on their funding rounds, which would mitigate the dilution issue, while I argue that their performance against their guided metrics have lagged, which has impacted the valuation.

        There are other minor discrepancies between us, but the main difference is that he is bullish about the ultimate outcome and I am not.

        Considering that he’s done all the requisite homework and understanding of the model, I can’t fault him for his opinion. I respect it.


        1. You must admit the pair, Ted and Mitch, do fall short on executing in many categories, including customer service, corporate finance, investor relations, vendor negotiations, public relations….


          1. No doubt Mitch & Ted have had some fits & starts!!! But in the end Mitch is seasoned and has been successful at Netflix & Redbox, so I still give him the benefit of the doubt as his career has been all about disrupting business models!


          2. Be my guest, but they drew up the plan. It’s not fits and starts. It’s been all fits… and Mitch isn’t what people think. I’ve discussed this 😂😂😂


          3. EXACTLY.

            As I’ve said before (and Ben agrees with this)… Mitch is a good COO. That’s what he REALLY did at Redbox (after giving up his NFLX stock in 2001) and Ted is a good CMO, but that leaves the company without a good CEO or CFO… and that’s critical for a company like this.

            That’s why the stock has gotten killed. Retail investors always want to hear hope, but professionals want to hear truth… because that’s what makes money!

            I’ve been convinced of being wrong before, sold my position, reversed my position, and made $$$ because I checked my ego at the door… and was rewarded with a check in the bank.


  18. So you think Netflix, Amazon, Uber, etc got everything right every single time – they’ve all been full of fits & starts!


    1. They all had their own stretch of fledgling along in the start-up stage. Not to mention they’ve mad several mistakes too once they became more mature. We are in the very early innings w Ted/Mitch running MP


      1. Mitch has 2 plus years ( possibly more as a consultant ) with the MP business. He bought in some Outerwall people in when he got control. So you really can’t use the “early innings” excuse. His execution is sub-par. IMO.


        1. Customer service and other operational stuff is def on him, but to be fair, the cash burn is largely out of his hands. However, they clearly didn’t think this through ahead of time. Their game plan has changed markedly over the past six months. 🤷🏻‍♂️


          1. After listening to Gregg Kaplan’s story you can see some seat of the pants moves he made that luckily broke his way. A very sharp and ballsy entrepreneur. Great story.

            Looks like he is an major influencer of who Mitch is, or is trying to be.

            Liked by 1 person

          2. As the doors close on their original ideas, they invent new ideas on the fly to make money from a subscription. They do not have any systems framework in place to get a cut of concession revenues. How do they expect the theater to track revenue from a popcorn sale? If they were doing it now the reddit posters involved in any beta tests would be talking about it.

            Ted claims on 4/12 they could make $6 per subscriber today? From what theater chain, or studio advertising? Luckily for them Yahoo / VZ / oath are giving them a platform and soft interviewers to tell this tale and keep retail hoping for profit.

            Liked by 1 person

      1. There we go, u inadvertently answered a few of my questions! If they overcome your issues, I’m all in 🙂 For now, just some early casino money on the table.


    1. This feeds into my theory that they may introduce movie limits more broadly and/or introduce tiered pricing sometime later this year. I originally thought they’d wait until 10mm subscribers but it’s looking more and more that somewhere between 5mm – 10mm is the sweet spot where the official changeover could happen.


      1. I think it happens after ER, Mitch has eluded to a family plan and bring a friend type plan that allows subscriber to purchase additional tickets at a discount. Expecting this before the summer. This will capture a larger percentage of families/moms/kids which are in turn the more casual users they are trying to attract. This will allow them to capture more of the box office tickets without the 100% expense from subscriber revenue.


        1. I will be interested to see how many signed up for this. It could be interesting, because it’s likely to attract more affluent moms, which I suspect are more likely to keep the service even if they don’t use it fully.

          I’m a shareholder in GAIA and see this dynamic at work with them. It would likely only be a small positive (unless millions sign up) but like it.


      2. Possibly. Either way, it’s a good test to see that their back-end systems are set up for this.

        That said, this is just a promotion and a fairly high limit for a bundle that’s priced at 50% off (both services are normally $9.95 per month).

        If they are splitting the promotional dollars 50/50, it’s not going to do much to help MP’s cash burn. Depending on the number of takers, they will burn through the cash they receive in an average of <two weeks per subscriber (but then, still need to support them for 2 1/2 more months during the industry’s peak season).

        I do acknowledge that they are steadfast in their resolve to get over 5 million subscribers this year, regardless of the cash burn required. Again, I think this is because they believe they can continue doing funding around at the common shareholders’ expense.

        I’m interested to see if that continues and how it plays out.


  19. Their bundle with Fandora had a similar cost split with no movie limitations, so this is a big step in the right direction. Also, iHeart has a much bigger market with 250 million users, so it’s wise of MP to train the broader base of potential new customers to potential movie viewing limitations.


    1. Agreed.

      They are doing a great job of attracting new customers. It would be great if they found a new way to get funded without crushing common shareholders. I couldn’t be more interested in seeing how the next few months get financed. 🧐


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