A little more than one year ago, Bloomberg News sent Blockbuster's stock price tumbling, from 77 cents to 22 cents, with a report that the Renaissance Tower-based company had hired outside counsel to "explore a possible bankruptcy filing," which Blockbuster quickly dismissed. This morning, Bloomberg again all but predicts the inevitable demise of Blockbuster in a lengthy piece headlined "Blockbuster Bondholders Betting Company Will Go Out of Business."
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
Long story short: Analysts and investors don't believe the company can fend off Netflix and Redbox while also paying down nearly $1 billion in debt ($390 million of which comes due in 2012). As far as bondholders are concerned, the company's worth about 76 cents on the dollar, even if were to restructure in bankruptcy -- which CEO Jim Keyes has said ain't gonna happen despite that SEC filing in March. Says Stan Manoukian, a Los Angeles-based analyst, Blockbuster "is slowly dying. It will cease to exist by 2013 for sure." To which Blockbuster's chief financial officer, Tom Casey, responds, "A large-scale liquidation is nothing we have planned."