MoviePass' parent company wants to spin it off

New York(CNN Business) The parent company of MoviePass wants to spin off the movie subscription business as a separate public company.

Helios and Matheson (HMNY) announced Tuesday that its board of directors has preliminarily approved a plan to create a new subsidiary called MoviePass Entertainment Holdings. MoviePass would be spun off as its own company, and it would include all of the parts of the business that are associated with movies and entertainment. That includes MoviePass, as well as a film division, a venture unit and Moviefone, which Helios bought from Verizon earlier this year.

Since Helios gained control of MoviePass last year, the company "largely has become synonymous with MoviePass in the public's eye," Helios CEO Ted Farnsworth said in a news release. He added that Helios shareholders and the "market perception" might benefit by spinning off all the company's movie-related assets.

Helios and Matheson stock was trading at an all-time high of nearly $39 a share in October 2017. Now the stock is trading at about 2 cents — and that's after the company approved a reverse split to boost the price 250-fold earlier this summer.

The spinoff plan is not yet final. Helios said in the news release that the spinoff is subject to several conditions, including the completion of audited financial statements of MoviePass entertainment and the approved listing of shares of the new company on Nasdaq or another trading market.

The New York attorney general is investigating Helios, a source familiar with the probe confirmed to CNN Business last week. The state is looking into whether Helios misled investors about its finances.

The stock was up about a half cent Tuesday.