On February 12, the Nasdaq stock exchange officially delisted Helios & Matheson Analytics (HMNY  ), and trading of the stock was suspended the next day. HMNY had failed to meet Nasdaq's listing standards by repeatedly trading under $1. The parent company of MoviePass underwent multiple reverse splits before its demise as a Nasdaq-traded stock. Adjusted for reverse splits, the price was as high as $8,812.50 in July 2005 before trading around 1 penny in the days before delisting. Now HMNY trades over-the-counter (OTC) on the OTC Pink markets. A HMNY spokesperson said the delisting has no effect on the daily operations of HMNY, MoviePass, and its other subsidiaries, and HMNY will proceed with a partial spinoff of MoviePass.

When HMNY acquired MoviePass in 2017, it was a simple idea. Customers would pay $9.95 a month to see up to 1 movie a day in theaters. The price cut spurred millions of people to become new subscribers, but also resulted in losses of hundreds of millions of dollars. When MoviePass raised prices and restricted movie viewership last year in an effort to shore up profit, it was already too late. Movie blackouts and demand-based fees ensued. Paying customers canceled their subscriptions, and revenue declined further. Shareholders dumped the stock en masse, and reverse splits could not save the stock price from tanking.

Analysts offer three main theories why MoviePass failed. First is that MoviePass's consumer-friendly price disruption business model was doomed due to the price inelasticity of movies. Second is that the influx of discount customers was bad for theaters, meaning movie lovers intentionally subscribed and reliably consumed to save money. The third is that the movie theaters themselves entered price disruption and created subscriptions to run around and nearly bankrupt MoviePass. Whichever theory is correct, MoviePass can be seen as a cautionary tale for startups to avoid pursuing the idea of disruption at any cost.

With MoviePass all but unusable, American moviegoers have a few options. Sinemia offers a more expensive subscription, but it requires two-layer identity verification and assesses annoying misuse and convenience fees. Cinemark's (CNK  ) Movie Club offers one ticket per month for a comparatively pricey $8.99, and the number of participating theaters nationwide is limited. AMC (AMC  ) offers the AMC Stubs A-List, which provides admission to three films a week for $19.95 a month. The old-fashioned way of buying weekday matinee tickets remains cheap - or at least, in the single digits. Whatever MoviePass's ultimate legacy will be, it has positively sparked an increase in consumer choice.

The author does not hold any positions in any of the securities above.