A Blockbuster Free-Fall

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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.

Keep the Dallas Observer Free... Since we started the Dallas Observer, it has been defined as the free, independent voice of Dallas, and we would like to keep it that way. Offering our readers free access to incisive coverage of local news, food and culture. Producing stories on everything from political scandals to the hottest new bands, with gutsy reporting, stylish writing, and staffers who've won everything from the Society of Professional Journalists' Sigma Delta Chi feature-writing award to the Casey Medal for Meritorious Journalism. But with local journalism's existence under siege and advertising revenue setbacks having a larger impact, it is important now more than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" membership program, allowing us to keep covering Dallas with no paywalls.

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Join the Observer community and help support independent local journalism in Dallas.


Join the Observer community and help support independent local journalism in Dallas.