MoviePass couldn’t afford to pay for movie tickets on Thursday
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Re: MoviePass couldn’t afford to pay for movie tickets on Thursday
#2A couple months ago there were optimist articles about how they'll "make it in the long run", having "enough money to keep going before being profitable". Cinemark even announced something similar.
Guess it didn't last THAT long. I'm scared for other services with the same pricing scheme.
Re: MoviePass couldn’t afford to pay for movie tickets on Thursday
#3A couple months ago there were optimist articles about how they'll "make it in the long run", having "enough money to keep going before being profitable". Cinemark even announced something similar. Guess it didn't last THAT long. I'm scared for other services with the same pricing scheme.
It's eye-opening that there are companies that forgets about cash-flow and profitability...
Re: MoviePass couldn’t afford to pay for movie tickets on Thursday
#4On what terms would you actually lend MoviePass $5m? It would seem surprising at this point if MoviePass makes it to September.
Re: MoviePass couldn’t afford to pay for movie tickets on Thursday
#5Was the entire play of MoviePass to pay for people's movie tickets until they make it and then jack up the prices + negotiate with cinemas for better deals? What was the "make it" condition?
Is this a common strategy?
It also loosely reminds me of the dotcom era strategy. It doesn't matter if we're not making any real money, we have a lot of users. Surely that can be converted into money somehow. We're worth billions of dollars because we have 300 million users!
Re: MoviePass couldn’t afford to pay for movie tickets on Thursday
#6On what terms would you actually lend MoviePass $5m? It would seem surprising at this point if MoviePass makes it to September.
You would no doubt be surprised. High risk lending is a thing in the Bay Area at least, I attended one of the VC lunches and at my table was a person who did that for a living for hedge fund. Sort of like really really big payday loans, but with worse terms.
He mentioned that one of the most unusual notes they had written was backed by obligations on future projects by the CEO of the company, so if the company folded and the CEO went on to start a new company the hedge fund could convert that defaulted note into a percentage share of the next company. Very creative stuff.
Re: MoviePass couldn’t afford to pay for movie tickets on Thursday
#7Was the entire play of MoviePass to pay for people's movie tickets until they make it and then jack up the prices + negotiate with cinemas for better deals? What was the "make it" condition? Is this a common strategy? It also loosely reminds me of the dotcom era strategy. It doesn't matter if we're not making any real money, we have a lot of users. Surely that can be converted into money somehow. We're worth billions…
I think of Moviepass as the pets.com of 21st century VC madness. That said, they clearly had a great pitch, I'd love to see their series A pitch deck.
Re: MoviePass couldn’t afford to pay for movie tickets on Thursday
#8Lending $5 million to MoviePass at this point is probably as close as you can get to literally throwing your cash on a burning heap. Must be some term sheet!
Re: MoviePass couldn’t afford to pay for movie tickets on Thursday
#9On what terms would you actually lend MoviePass $5m? It would seem surprising at this point if MoviePass makes it to September.
You would no doubt be surprised. High risk lending is a thing in the Bay Area at least, I attended one of the VC lunches and at my table was a person who did that for a living for hedge fund. Sort of like really really big payday loans, but with worse terms. He mentioned that one of the most unusual notes they had written was backed by obligations on future projects by the CEO of the company, so if the company folded…
What are the chances the CEO will disclose those terms to prospective employees of his new companies? Near zero?
That's a serious landmine for employees who get part of their comp as stock options.
Edit: edited to reflect what I actually wanted to say (future companies instead of current company)
Re: MoviePass couldn’t afford to pay for movie tickets on Thursday
#1024% premium on a loan that will last them until August 1 is insane. I don't think they're going to make it past August or September at this point.