Blockbuster (BLOAQ)

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Company: Blockbuster (BLOAQ)
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62%
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43 votes

  Blockbuster (BBI)/Bulls/Blockbuster goes online with video games

Blockbuster aims to become the first online service that will house movies and games under one roof. On Feb 11 they announced a new pilot program which will allow certain Total Access members to rent movies as well as video games as part of their Total Access membership. Assuming the pilot moves forward smoothly and I cant see it wont the offering will be made available nationally in the second half of 2009. Blockbuster will maintain the benefit to its subscribers of exchanging mail rentals for free in-store movies and in store game rentals. Being able to order online and then bringing the movie or game back to the store at my leisure is a huge convenience. Also I do not see families skipping home entertainment in these tough times as this is probably the cheapest form of discretionary spending. Convenience is the name of the game and Blockbuster will have a huge leg up on any competition. In addition Blockbuster is going a step further in placing Kiosks in strategic locations to take advantage of an untapped growth area.

The current concern is the debt load of BBI which currently stands at around 1 billion. More importantly more than half of that amount is long term debt and only approximately 200 million is due this year. With the current bank crisis banks are very hesitant in lending out money but the one thing that Blockbuster has on its side is Carl Icahn. More than likely if Blockbuster is unable to tap a credit line or roll out their debt through a bank Carl could lend them money through his personal investment vehicle. While I do realize there is risk in the current environment I believe at the current price of $1.28 for BBI and $38.41 for NFLX, Blockbuster is the better value. thevoice@voicedup.com

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50%
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4 votes

  Blockbuster (BBI)/Bulls/Blockbuster Amends Revolving Credit

Before market open on 4.3.09 Blockbuster announced that it finalized the amendment of its revolving and term loan facility. This amendment includes commitments from lenders (JPMorgan, Monarch Alternative Capital, and Silver Point Capital) for a $250 million revolving loan refinancing due September 30, 2010.

  • This news was expected, and has been in the works over the past six months. The company currently has $160 million due on these loans in August 2009, and at that time its total revolver of $300 million was scheduled to end.
  • Refinancing is positive as it provides the company with increased liquidity (even if only for an extra year). The company has sufficient free cash flow to pay down the credit facility in full by September 2010, and will have the flexibility to allow the facility to expire at that time if it should so choose.
  • Blockbuster's valuation is compelling and there is no imminent risk of bankruptcy, as its stock price implies. Blockbuster's stock should appreciate as management continues to execute.
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4 votes

  Blockbuster (BBI)/Bulls/Rising same store sales for 2008

Blockbuster Inc. (BBI), the top U.S. movie rental chain, said sales at stores open at least a year rose 4.4% in the fourth quarter as strong demand for electronics and video games overshadowed a slump in rentals. Blockbuster shares jumped 23% following the news and the company said it has no plans to file for bankruptcy, as was rumored, Reuters reported.

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6 votes

  Blockbuster (BBI)/Bulls/Recession

During bad times, families will rent movies before going out to the theater. This will benefit all movie rental places.

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33%
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3 votes

  Blockbuster (BBI)/Bulls/Blockbuster turns to video games

Mark your calendars for June 30th. That’s the anticipated pilot program Blockbuster (BBI) is launching which will begin to distribute video game titles along with its movie by mail service to limited subscribers. The program will initially kickoff in Cleveland and should be completely rolled out by the end of the year. This initiative serves nicely as it places Blockbuster ahead of Netflix (NFLX) in terms of content offering. Blockbuster will be the only service available which will rent games and movies. It is also a great recession proof business as the videogame industry behaves very well during financial crisis.

Currently Blockbuster offers free in store rentals with the Total Access service, when it comes to video games, members will be offered games at half price when visiting stores. This feature is a long time coming. Members now can upgrade their membership and will be charged one fee instead of holding multiple memberships between Netflix, Blockbuster, Gamefly, Gottaplay etc…

Albeit a great step forward, Blockbuster has a $400 million loan payment coming due next year. Will banks be as generous next time around or will Carl Icahn step up to the plate and provide financing. Time will tell.

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33%
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3 votes

  Blockbuster (BBI)/Bulls/Blockbusters focus has shifted to 2010.

What is on analysts minds is the credit facility that expires on September 2010. Date is not that far away and concern is the terms by JPMorgan are extremely unfavorable and the cost cutting may not be enough to prolong Blockbusters existence past 2010. Economic recovery will play a huge role in Blockbusters future.

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33%
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3 votes

  Blockbuster (BBI)/Bulls/Laziness of Americans

Although I put serious and possibly too much emphasis on financials, when considering whether a company will succeed or fail; I often forget to take matters into account, which cannot be measured by any graph or chart. An example of this is the lazy lifestyle and mentality of the average American consumer. Another example of immeasurable factor, would be a type of clothing, movie, or website becoming "popular" or "in-style". This can be shown clearly in regards to the Blockbuster vs. Netflix Competition. While both companies are fighting to bring the best, and newest functionalities to their online services, only one (Blockbuster) gives the consumer the option of immediate gratification. How often does one come home and say "I really, really want to see that move...tommorow." Maybe one would, if there were no walk-in video rental stores; however, Blockbuster does have this option. While Netflix may be able to get the consumer the movies they desire. The average lazy, spoiled American Consumer, wants it here and now.

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