Good replies, but lets remember that BBI does get all the new releases for a full 28 days before other companies which forces people to go to BBI. They've now added the feature of a customer getting the movie in the mail and then have the option to either go to the store to return it or mail it back which is much more convenient. Funny, SIRI was in this exact situation, probably even worse, everyone was saying how they'd go bankrupt and look at them now. I honestly think BBI is going to be the next SIRI. Lets see what happens on the 13...
competitor Movie Gallery just closed a bunch of stores and their shares trade at 4 cents after trading as high as $4.99 this year long term, people are moving towards ppv and ordering online and viewing on tv thru their Direct TV account or similar redbox will continue to be popular for a time i think, but eventually that too will fade and all tv's will connect to the internet and people will buy online
On the brink of their collapse, Sirius actually had $4B in debt and their near term corp notes were trading at 15 cents on the dollar. Blockbuster currently has $975M in debt. $300M of this is in the form of 2012 sub notes and the rest is a very recent restructured chunk of secured debt put together by none other than JPMorgan. For those talking about the store closings, that is part of the digital remodeling business strategy. They are decreasing their retail foot print as they roll out 10,000 blue kiosks in 2010. They were very smart about this and did not rush into it. They picked up NCR as a partner and NCR is completely flipping the bill. Blockbuster also now has exclusive on demand movie purchase and rental capability off their website, cheaper than cable on demand, for all new release movies. A good majority of the revenues on hot new releases comes within that first month. Now Redbox nor Netflix gets a piece of this, which means Blockbuster revs will get a nice bump. Blockbuster is cutting $250M in costs this year. They are in the midst of selling off Euro assets as well which will yield conservatively another $75M in cash. Recent other on demand partnerships include Samsung, Phillips, TIVO, and the first cell phone service for the new T Mobile HD line. Blockbuster now has the same exact service that Netflix and Redbox provides, but only better and cheaper. Blockbuster's mail bluray plan is $4 cheaper than Netflix. For old movies that Redbox specializes in, Blockbuster offers the same at $1. Eventually there will be download capability at the blue kiosks, you will also be able to exchange at store and or kiosk and or with your online mail plan or total access plan. Wait til the actual marketing and advertising on this kicks in. Allot of folks are upset with Netflix and if you browse some of the tech/HD forums you will see lots of them who were complaining about the recent 28 day release agreement ended up going back to blockbuster. Netflix is now cornering itself as a streaming niche. Which is fine. You can't stream 1080p though with lossless audio and you cant get the newest movie releases either from Netflix. People realize this and will start downgrading their Netflix plans going with the $8.99 only per month with unlimited streaming. So Netflix is going to get hit on two different sides with respect to revs as this plays out. And last but not least, in the most recent 10K, it was announced by the CFO that blockbuster is in the midst of successfully wrapping up a recapitilization effort that would not only take care of this overhanging debt, but it would also negate the need for a reverse stock split thus fulfilling the NYSE listing requirement. Also worth noting is that Wattles has been buying a mother load of the common shares on the open market, while some other unknown entity continues loading millions and millions face amount blocks of the 2012 notes on the open bond market. Bottom line is, this debt is gonna get service one way or the other. Either they are going to get a cash fusion like Sirius did and the stock is a 4-5 bagger from here easily or they will have to do some kind of debt for equity stock swap in which case, dilution will occur.
And here is a little perspective for you. Coinstar just reported earnings which everyone was just giddy about. Their first quarter revs were $263.2M from Redbox DVD business, which accounts for 75% of total company rev. But these numbers are not affected by the 28 day rule agreements, nor the blockbuster blue kiosk rollout happening now. But even still, that would put Redbox annual revs at around $1B. Blockbuster recent annual revs was near $4B. And one other thing I forgot to mention, in the recent 10K, blockbuster announced that their annual shareholder meeting in May has been pushed back to June, so that they can have the debt recap efforts wrapped up and ready for announcement.
Do you by chance work for the street.com ?? [ Inside joke; they are huge BBI negative spinners] Amazing how things can always have a spin to them. Well to shed a little more on your referenced above points: The store closings are part of their digital plan. They will recoop $250M this year alone on that initiative. Bringing back late fees is no different then if you keep a Redbox movie for 4 days instead of returning it the next day. The Pricewaterhous disclosure is standard operating procedure. The bankruptcy reference was in there last year as well, just before JP Morgan gave them $675M in a secured offering. Carl Icahn selling could be for a whole bunch of logistical reason of which I am not even going to try to cover here in this post. The PPS has rebounded significantly since this event.
I think you guys are a bunch of idiots. You had the same logic buying PALM at much higher levels. Finally, by the grace of God, HP bought them out. Now you guys are playing yet another downtrending stock trying to fit it against a stock that ran and shouting "what if". If BBI cant move up while everything is moving up then what will happen when everything starts moving down? There will be a new chapter opening up for BBI and that is number 11.
No, you're the idiot. I've read your idiotic trades and posts on here. Geezus. I can't believe anyone even bothers responding to your posts. BBI is a legitimate trade. I do think there is a likelihood that it would go bankrupt, so I'm buying puts to cover the trade. 1% on puts, 1% on the common.