Print 71 comment(s) - last by callmeroy.. on Apr 30 at 10:41 AM

Blockbuster may have been busted by Netflix

For many years Blockbuster video enjoyed great success in the movie rental business. Blockbuster is one of the largest movie rental chains in the country, but the company has found that its continued existence is far from guaranteed.

Blockbuster has announced that there is "substantial doubt" about its ability to continue as a going concern. A going concern is a qualification that refers to an auditor's assessment of a company's ability to continue operations reports MSNBC.

Blockbuster is struggling with profitability and viability in the face of the rising popularity of mail-order rental services like Netflix the company stated in a SEC disclosure. Blockbuster had previously disclosed that an auditor was likely to raise doubts about its long-term viability.

Blockbuster stated last week that its revolving and term loan agreement had been amended giving the company a $250 million revolving loan for financing maturing on September 30, 2010. The company thinks it will be able to close the financing around May 11, but states that the closing of the loan is not assured at this point.

Blockbuster says that even if the loan is funded it, "may not have sufficient liquidity to finance the ongoing obligations of our business, which raises substantial doubt about our ability to continue as a going concern."

Blockbuster shares fell 3 cents to 85 cents in trading after hours after closing at 88 cents reports MSNBC. In July of 2008 Blockbuster was considering the purchase of now defunct Circuit City.  

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Aw crap.
By Lightnix on 4/7/2009 2:06:06 PM , Rating: 2
Blockbuster is the only store in my area that sells video games or movies without having to go out of town. I really don't want them to close, it was bad enough when Choices shut its doors. It's also the place I recently applied for a job to, too. Bugger.

I really hope they don't close.

RE: Aw crap.
By Penti on 4/8/2009 3:20:31 PM , Rating: 2
Well if they do I'm sure someone else sees the opportunity to serve those customers. Someone might even buy the same store. Or like in Sweden your gas-stations might begin renting movies or other stores. Any ways it was ages ago I rented a movie and I wouldn't suffer from having no options. The local store here has gone through various owners. Like most others stores and businesses it's natural. If someone sees an opportunity you might even get something much better. But I don't see the point of most retailers they don't do much for the community. Without that extra value why should I even go to a store? A store I don't visit or shop at don't benefit me and it's just retailing not productive jobs.

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