La Jolla-based Triton Funds LLC is preparing to approach shareholders of MoviePass parent Helios and Matheson in an attempt to assume control of the troubled company, according to the venture fund’s co-founders.
Helios and Matheson HMNY, -37.00% has been struggling this past year to stay afloat, burning through large amounts of cash and turning to increasingly expensive borrowing. The company’s stock has plummeted in the past several months; last October, shares hit a high of $32.90, but they’re trading now at 10 cents, despite the company implementing a 1-for-250 reverse stock split last Tuesday.
Triton is not a typical venture fund. It is run by University of California of San Diego finance students, with an advisory board that includes alumni and faculty. The $25-million fund has a distinct slogan: “millennial touch.”
Helios and Matheson was mismanaged as a publicly traded company, fund co-founders Nathan Yee, Sam Yaffa and Yash Thukral told MarketWatch. They believe the company should be taken private and there needs to be a shake-up of management in order to capitalize on the company’s most valuable assets—the movie subscription model it popularized and the data it has collected from its subscribers, which now number over three million.
Most analysts don’t see much hope for the company. Some said the MoviePass model of allowing customers to see an unlimited number of movies for a low monthly fee was unsustainable from the very beginning. However, Triton thinks the movie subscription model is here to stay, and the company’s declining share price is a strong buying opportunity, said Yee.
Read: The spectacular rise and fall of MoviePass
Triton first approached Helios and Matheson last week and the company seemed open to discussions at first, Yaffa said. But by Friday, he and Triton’s other co-founders were told Helios and Matheson was no longer interested.
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Now, the fund is planning to “take a page out of Carl Icahn’s book,” said Yaffa. “We are deciding on our final valuation, and then we will reach out to the shareholders of HMNY,” he said, referring to Helios and Matheson by its ticker.
The Triton co-founders declined to disclose whether they had any current investments in the company. Helios and Matheson could not be reached for comment.
MoviePass announced this week it would be raising its subscription fee to $14.95 from the current $9.95 and limiting new releases in an attempt to cut costs and accelerate profitability. MoviePass would also be limiting those first-run movies shown on over 1,000 screens during their first two weeks of release, unless the movies were made available on a promotional basis.
Read more: MoviePass to raise subscription fee, limit access to some films in cost-reducing measure
Triton’s current investments include airport food delivery startup AtYourGate, cybersecurity company Bravatek Solutions and blockchain-based technology company DigitalTown, Inc. DGTW, +0.00% .
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