[url]http://www.reuters.com/article/idUSTRE66052720100702[/url]
[release]Blockbuster Inc (BBI.N) stayed a step ahead of bankruptcy after winning a crucial one-month reprieve on debt payments, but was forced to begin the process of delisting from the New York stock exchange.
The once-dominant video rental chain -- which has bled market share to more nimble rivals Netflix Inc (NFLX.O) and Coinstar Inc's (CSTR.O) Redbox -- failed to make debt payments due July 1. But Blockbuster said it had struck a forbearance agreement with creditors holding about 70 percent of its 11.75 percent senior secured notes due 2014.
Those creditors -- which hold debt amounting collectively to about $440 million -- agreed to hold off from exercising "remedies" until August 13 on the missed payments. But some analysts doubted the extension would matter in the long run.
The company is saddled with about $920 million in total debt and it has struggled to cover interest payments.
"Six weeks is not a long time in a tough economy, where nobody has much credit," said Michael Pachter, analyst with Wedbush Securities. "There's nothing on the horizon that makes it look like Blockbuster is going to be more profitable."
Based on first-quarter results, Blockbuster is on-pace for less than $100 million this year in earnings before interest, taxes, depreciation and amortization, Pachter said.
Also on Thursday, Blockbuster said its board has agreed to indefinitely extend CEO Jim Keyes' contract, which had been due to expire this week.
"The agreement provides us with additional time and flexibility as we continue to take steps to implement a more appropriate capital structure," Keyes said in a statement.
"While we are making progress in our recapitalization efforts and are in the process of negotiating term sheets with these parties, these are complex multi-party negotiations and take time."
The Wall Street Journal reported last week the company was discussing a cash injection with potential partners in a deal likely to involve some bondholders converting to equity investors.
Regardless, Blockbuster's Class A and Class B shares would be delisted for hovering below $1 over 30 trading days.
On Thursday, the company said its pending delisting from the NYSE resulted from shareholders failing to pass a proposed reverse stock split to keep its price at acceptable levels.
Blockbuster said last week that preliminary results from a shareholder vote showed it won approval for a reverse stock split. But in a regulatory filing late on Wednesday, the company disclosed a final count showed it failed to reach the required threshold.
Its proposal was approved by shareholders holding just 43.4 percent of outstanding stock -- short of the needed majority.
The NYSE first warned Blockbuster in November 2009 that it risked getting bumped because of its low share price.
Blockbuster closed at 23 cents on Thursday on the NYSE, down about 2.9 percent.[/release]
People still go to Blockbuster? Obviously not.
If they go under before it's due back does that mean I get to keep Blue Velvet?
I go to Blockbuster sometimes :frown:
[editline]11:32PM[/editline]
[QUOTE=JohnnyMo1;23140620]If they go under before it's due back does that mean I get to keep Blue Velvet?[/QUOTE]
That's how it went down for me, Movie Gallery, and Orange Box for 360, so maybe
I better keep an eye out for the store closing sales
Their competitors swept the Block from right under their feet
Blockbuster is FUCKED.
Good night, sweet prince.
After the Netflicks idea came around it was GG for blockbuster.
Thats what happens when an entire business essentially becomes obsolete.
Switched to Netflix, haven't look back.
[QUOTE=Triumph Forks;23140696]That's how it went down for me, Movie Gallery, and Orange Box for 360, so maybe[/QUOTE]
Yeah, the Movie Gallery here closed as well. My town now has zero movie rental stores.
I can't say I feel bad for the company. They failed to adapt adequately to changing times. There have been countless companies who stayed ahead of the game, and themselves managed to push the envelope of their respective industries.
The only funny thing about this whole situation, it wasn't illegal downloads that killed their company, but rather a fellow competitor from within the industry.
[QUOTE=Zeke129;23141624]Yeah, the Movie Gallery here closed as well. My town now has zero movie rental stores.[/QUOTE]
My city will have almost none too, as soon as Blockbuster goes down. I think there will be like 3 locations that still rent, and possibly then just movies, and none all too close to me.
I used to love renting games and stuff. Sure gonna miss it :frown:
i actually feel sad now. i loved going there when i was a small child :frown:
End of an era, I'll always have fond memories of going to Blockbuster.
[QUOTE=Dr. Fishtastic;23141351]Their competitors swept the Block from right under their feet[/QUOTE]
People don't even bother using actual idioms anymore. :sigh:
One of my earliest memories is going to Blockbuster and buying a Rugrats movie cassette. When Blockbuster finally goes, I'll never be able to rent any games since I don't rent frequent enough to sign up for Gamefly or anything.
I despise how high their prices have gotten and how they took back their "no late fees" policy though.
Aw man. I love my local Blockbuster. The people that work there watched me grow from renting SNES games, to renting PS3 games. I'm going to miss them if they go out of business :frown:
Shit, how am I going to rent my blu-ray movies now?
Well oh shit.
I might have a job there.
Durr DUrr Im PrismatexV8 And I Rent Movies
Its the Netflix, Hulu, and those damned vending machines!
:argh:
[QUOTE=Slendermans Dad;23143604]Durr DUrr Im PrismatexV8 And I Rent Movies[/QUOTE]
july 2010
:frog:
This sucks, I still go to blockbusters :[
Time to buy a lot of shitty movies.
I liked blockbuster, but the dollar a day after the return date and like 12 dollars here for a 3 day game rental, I said fuck it and now netflix is my new movie source.
I'm amazed that video rental stores are starting to phase out. The Internet is truly an amazing technological marvel.
Video stores in Australia aren't even close to phasing out, there's no way something like netflix can take over when our Internet is one of the worst in the developed world.
Blockbuster are pretty much obsolete.
[editline]11:48AM[/editline]
[QUOTE=CivilProtection;23147744]Video stores in Australia aren't even close to phasing out, there's no way something like netflix can take over when our Internet is one of the worst in the developed world.[/QUOTE]
Yeah, but when you do get a better internet service, that market will be removed.
I can't wait for the blockbuster to go out in grafton
cheap shit here I come!
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