Its really going to be cut and dry move based on results and guidance which I can not predict. And unfortunately not much you can do before hand with respect to the common stock, other than a pure speculation buy. Although I am optimistic on them reporting better revenues and cash flow this coming week, you just never know sometimes. Keyes has stated previously that BK was off the table. But then in a more recent filing, there was the obligatory concern that things need to improve or down the road they could cease to function and file for BK 11 protection. Keep in mind though, this same disclosure was referenced in their annual filing last year, just months before JP Morgan gave them $675M in a secured offering that priced at near par. Allot of people have been misinformed and just have the wrong idea of whats going on with BB. They have clearly made all the right strategic moves in terms of driving revenues higher, creating new streams of rev production, improving cash flow, maintaining cash on hand to pay down debt/interest, and dumping stores in turn for kiosks along with a complete digital transformation. BB is going to be the end all be all for movies anywhere you are and want to go. I can NOT believe no one is talking about that huge milestone they achieved this past week with their new API deal. They are gonna be launching "Blockbuster Everywhere." One single platform that allows you to get movies on any media device, cell phones, Ipads, laptop, computer, TV, kiosk, downloads, on demand. You name it. There is also some huge speculation right now going on with the Carl Icahn move to LionsGate. He got the poison pill dumped so he is pretty much gonna lock that down. His goal is turn LionsGate into a pure distribution company. Well guess who has the largest and greatest media movie library?? That would be blockbuster. And Keyes recently said in an interview with respect to Carl Icahn dumping shares that Carl can now do more for them on the outside than he could have on the inside. Bottom line, IMHO this is one of the greatest opportunities I can recall in years. The only critical piece to this, is that we need to start seeing improvements now on the cash flow & rev side. As long as that happens and we get some more insight with respect to the debt recap initiative, which we will in June, everything is going to come together. Keyes and the CFO talk to the majority debt holders on a daily basis. They are in constant communication. Buying the stock has the most risk in this scenario because you still never know if dilution may occur at some point. We just have no way to tell. That is why I am playing the debt here. As far as hedging your common stock positions, at this point, with PPS under .40, nearest strike out of the money puts are just too expensive. If the stock ramps, those puts will evaporate. On the same token, if the stock tanked, your maximum profit is like .30-.35 or so per put depending on how far out you go. The further out you go, the less you will make because the more time premium and IV you will pay.
delta Looks like we have another big fish holding a good stake in BBI http://www.tonic.com/article/one-mans-plan-to-save-blockbuster/
Blockbuster will be forgotten about sooner than later.... There is no more growth left as everything will move into digital format. Even the kiosks they are pushing out are late to the game and will be gone in the next 5 years. Why are people so bullish on this worthless company is beyond me.
Delta, what range do you think the earnings need to be for the stock to go up or stay where it is? What range would it be to break the stock way down? Is there only 2 things that could happen on the earnings day, either it goes up or down or is there more ? And what time exactly do they release the earnings? BTW, Gregery Meyer wants a seat on the BOD http://www.dallasnews.com/sharedcon...kbuster_11bus.ART.State.Edition1.4048f2e.html
That Greg Meyer thing is allot of noise. I really hope that gets sorted; its not like BLockbuster has the money to just piss away on a proxy protest. Earnings release is Thursday @ 4:30PM. I think stock makes a pretty big move here based on this earnings release. Allot of unanswered questions in play. The common stock could explode if we get tangible better/positive results with respect to Euro sales, revenue bump from Movie gallery, 28 day agreement, new capital structure with studios, store closings, and newly placed partnerships with ondemand platforms. The street is expecting a loss obviously on earnings, but how much is open for debate. If they were to lose allot less on EPS basis that would be a huge catalyst for the stock. This release is critical because we will finally get a glimpse into seeing if their proverbial digital ship is truly turning around, so to speak. I would definitely not want to be short going into this call. The bonds are trading right now for 20 cents on the dollar. Much better risk reward here IMHO. You can not beat that as opposed to the common stock ramping here again in .45 range. The definitive chapter however comes in June at their annual shareholders meeting where they reveal their official debt recap initiative(s). This will alleviate the current debt structure, fulfill NYSE listing requirements while taking care of market capitalization and potentially diminishing need for reverse stock split.
Are you just thinking this or do you have DD to back this opinion up?? Honestly for my stake and interest, I am not concerned about 5 years from now. However you bring up a thought provoking debate. This will be interesting to see it play out. Blockbuster has several large recent partnerships in the on-demand space. Currently offering services including new releases that are significantly cheaper than cable on demand. Dont be so quick to discount those blue kiosks. They will have 10,000 up and running by end 2010. These blue kiosks will also soon be equipped to perform digital downloads on external media devices so you can go plug it into your TV, laptop, computer, etc. Did you see my post about Blockbuster everywhere?? This one platform API is going to be one of a kind transcending every possible medium channel of watching a movie you can think of, including cell phones. One thing I really would be curious to hear your input on is do you realize that their stores have generated them $3B in annual revenues in the past?? They also have 50M+ subscribers. This 1st quarter earnings release will be very interesting to see what kind of pace they set, i.e. $750M in revs? etc. or will revs continue to fall off. That is the big question. How will all the new initiatives also play into the rev picture? But allot of these points I make are really for the here and now. But 5-10 years from now will truly be interesting to see where we go.
Sure thing. Well the stock is making a very impressive move this morning on absolutely insane volume. PPS up 20%.
An insane move alright...to the downside...that was a huge miss. What are they going to do now to make up for the huge revenue loss? Lemme guess, a humongous secondary offering? BBI isnt the next SIRI, its the next Circuit City...