A Blockbuster Free-Fall
Near the close of business Wednesday, we posted Blockbuster CEO Jim Keyes's admission that the Christmas season delivered little more than a lump of coal for the Dallas-based videotailer, as in: "Our performance during the holidays was well below expectations." When I spoke with Keyes at great length in December, he sounded optimistic despite the company's myriad setbacks, both technological and financial. Matter of fact, Keyes said news of Blockbuster's demise was a matter of mere perception: "We're losing the PR battle."
Not today. Today, and ever since Wednesday's press release, the company's stock is taking an absolute beating. At the time of this posting, Blockbuster's stock is down to 43 cents -- almost half of its worth two days ago. A "downward spiral," as The Street calls it. Moody's said today the company likely has enough capital to make it to the end of the year, but then what? And Standard & Poor's Ratings Services just lowered its outlook for Blockbuster -- from stable to negative, "one step above highly speculative territory." Meanwhile, Redbox is test-marketing renting video games out of its parking lot kiosks, Netflix is making deals to stream over the Wii, while Blockbuster earlier this week sent word it's putting its Express machines in Brookshire's. That's losing more than just the PR battle.
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