MoviePass boosts stock with reverse split, then it plunges 35% | KEYT

NEW YORK (CNNMoney) – This isn’t how they drew it up.

One day after the parent company of MoviePass announced a drastic effort to boost its stock price from 8 cents to $21, the price of the stock immediately tanked.

Shares of Helios and Matheson started plunging as soon as the market opened Wednesday. The price eventually closed at $10.60 per share, a drop of more than 50%.

The company on Tuesday said it would approve a 250-for-1 reverse stock split, an attempt to keep it from falling off the Nasdaq stock exchange. Investors have grave doubts about the viability of its signature product MoviePass, the service that lets you see a movie every day for $10 a month.

The reverse split was a largely cosmetic change for shareholders, since their stakes are valued the same afterward. But because the price was so cheap, the stock was in danger of being delisted from the Nasdaq stock exchange.

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MoviePass boosts stock with reverse split, then it plunges 35% – KEYT.