How the disappearance of the first MoviePass render turned into a scandal
Next season’s best-selling drama might just be about MoviePass.
The collapse of the first interpretation of the subscription service for moviegoers – which had, at its height, allowed some 3 million customers to see a film a day in theaters for just $9.95 a month – had seemed quite dramatic when the losses finally increased. bankrupted MoviePass’ parent company.
Then last week two of MoviePass’ former executives, ex-chairman Ted Farnsworth and ex-CEO Mitch Lowe (who is a co-founder of Netflix), were criminally charged by the Justice Department, alleging that the executives had engaged in a scheme to artificially inflate the stock price of MoviePass parent company Helios and Matheson Analytics in order to attract new investors.
Fortune learned last Friday that Farnsworth was arrested in Washington, DC, according to court records. An arrest warrant is still issued for Lowe, records show, although he does not appear to have been arrested yet and could not be reached for comment via his personal website or agency. public speaking.
Farnsworth and Lowe allegedly misrepresented MoviePass’ “unlimited” plan to investors, saying MoviePass could break even or break even through subscription fees alone, according to the Justice Department. Meanwhile, Farnsworth and Lowe knew the $9.95 plan was a “temporary marketing gimmick” used to grow the subscriber base and was used to artificially inflate the stock price of MoviePass’ parent company. . Former MoviePass executives are being prosecuted by the Justice Department and the FBI’s New York field office is investigating the case. This is in addition to charges brought by the SEC for allegedly making materially false or misleading statements regarding key aspects of MoviePass’ business model.
In the meantime, Farnsworth has hired George Terwilliger III, who was appointed deputy attorney general for the Justice Department during the George HW Bush administration, as his attorney, according to court documents. It is not yet known who is representing Lowe or if he has hired an attorney.
At this point, these claims are just charges. The Department of Justice presumes all defendants are innocent until proven guilty in court.
But it’s still a total mess. And I guess that’s not the best news for MoviePass co-founder Stacy Spikes, who had bought out the assets of MoviePass and is now embarking on an attempt to revive the service from the ashes. (To be clear, Spikes was not named in any of the charges. A MoviePass spokesperson did not respond to a request for comment.)
Spikes said he was kicked out of MoviePass after he recommended raising prices for the service. Raising those prices might not have been such a bad idea.
Please note…Yesterday’s Q&A indicated that Xos had filed for bankruptcy. This is not the case, and I regret the error.
Jackson Fordyce curated the deals section of today’s newsletter.
– Aspen Power Partnersa Dallas-based decarbonization platform, raised $350 million from funds managed by carlyle.
– Hoppera Montreal, Canada-based travel booking app has raised $96 million from Capital one.
– AutoLeadStara Miami-based digital data and customer experience platform for the automotive industry, raised $40 million in funding led by Riverwood Capital.
– Data Loopa Herzliya, Israel-based AI data management and annotation platform raised $33m in Series B funding. NGP Capital and Alpha Wave Ventures co-led the round and were joined by investors, including Amiti Ventures, F2 venture capital, Eyal Gouraand Our Crowd.
– Ernestaa New York-based custom carpet company D2C, raised $25 million in Series A funding. Addition led the round and was joined by investors including real companies and others.
– EdgeDBa San Francisco-based open-source database developer, raised $15 million in Series A funding co-led by Nava Ventures and Accel.
– Aletheaa Washington DC-based misinformation, misinformation and social media manipulation detection firm, raised $10M in Series A funding led by Ballistic Ventures Ted Schlein and Kevin Mandia.
– Archia San Francisco-based payment and management platform for dental practices, raised $10 million in funding. Bessemer Venture Partners and HRV co-led the round and were joined by investors, including Alven, Nurjas Makishev, Adapt businesses, 2.12 Angels, Collective Diagramand others.
– Stretch-Sensean Auckland-based motion capture technology company for the gaming and animation sectors, raised $7.6m in Series A funding. Nominal equity led the round and was joined by investors including GD1 and Scottish company.
– Teamtraderiea Los Altos, Calif.-based team building software company raised $7 million in Series A funding. Founders Fund led the round and was joined by investors including Heroic Companies, Dash Angels, Mobile Capitaland Overtime.vc.
– 5 minutes of AIa London, UK-based game-based learning platform has raised $5.7m in seed funding. AlbionVC led the round and was joined by investors including Halfen Companies, Wallet Companies, world blue lionand Edenred Capital Partners.
– Come backa San Francisco-based blockchain climate platform, raised $2.5 million in pre-seed funding. Cherry Ventures led the round and was joined by investors including Blue Bear Capital, Possible companies, Slow businesses, Allegory, Capital not boring, Climate capital, Eniac Venturesand other angels.
– WorkTorcha Wichita, Kansas-based service industry career platform raised $2.2 million in seed funding led by Capital Tenzing.
– Reynolda Equity Partners acquired a majority stake in Unified Health Services, a Memphis-based provider of revenue cycle management solutions for workers’ compensation claims. Financial terms were not disclosed.
– Seaga Manufacturinga portfolio company of Dominus Capitalacquired automatique Merchandising systems, a manufacturer of retail vending machines and cost and inventory control systems based in Kearneysville, West Virginia. Financial terms were not disclosed.
– VillageMDsupported by Walgreensagreed to acquire Health-CityMD Summita New York-based primary, specialty and urgent care provider, Pincus de Warburg. A deal is valued at around $8.9 billion.
– Aspen Power Partners acquired Energy Safaria New York-based solar energy provider, PPL Company. Financial terms were not disclosed.
– Masonite International Society agreed to acquire Endura Productsa Colfax, North Carolina-based manufacturer of door frames and door system components for approximately $375 million.
– Klaviyo acquired towel.io, a New York-based platform for writing and deploying browser-based code. Financial terms were not disclosed.
– Expulsiona digital lidar based in San Francisco, and Velodynea San Jose-based sensor and lidar solutions company agreed to a merger.
– OutSystems acquired Ionic, a mobile and desktop app builder based in Madison, Wisconsin. Financial terms were not disclosed.
– Clean energy companiesa Boston-based venture capital firm, has hired Yi Jean Chow as investment manager and Victoria Martins as a community manager. Chow used to be with Future energy companies and Martins was with Bread Project.
– Glasswing Venturesa Boston-based venture capital firm, has hired Hunter Hartwell as a partner, Jessica MullinsCamburn as Chief Financial Officer, and Ted Julien as a business partner. Formerly, Hartwell was with Strong Companies and Mullins Camburn was with Aduro Advisors.
– Capital of New Hollanda New York-based alternative investment manager, has hired Eric Smith as director of business development. He used to be with Admiral Capital Partners.