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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By BoFox on 4/7/2009 3:08:44 PM , Rating: 2
Oh yeah.. there are like 5 BB stores in my town, but most of them are like 5-6 miles away from me, spread out over a radius. So, whenever I go in a direction, I wanna drop off a movie and rent another one, but I have to go back to the same store that I rented the previous movie from. That sucks major @$$.

Right now, I'm renting about $40-50 worth of movies from Blockbuster a month. I'm getting maybe 10 Blu-ray tiles a month, plus roughly 15 DVD new-releases a month, and using an online e-coupon for a free game rental for my Wii. All of this cost me only $21.49 a month. Recently in December, BB recently charged my Paypal account 3 times for the monthly subscription, and I wanted to sue BB so badly, but my mercy won over since BB is sadly losing money on me. I have the old "unlimited" total-access plan that allows for unlimited in-store exchanges, plus 3 mailed DVD's/Blu-rays at a time. Whenever I got the movies in the mail, and finished watching them, I would take them back to BB for 3 free in-store exchanges. That way, I usually had 6 movies with me at a time from BB in total, at a time!!! Plus I would keep the game rental the entire month and then return it for a "refund" minus the restocking fee.

Now, BB recently changed its policy so that I have to return the in-store exchanges first before I can get more movies in the mail, for only 3 movies at a time in total. This policy went into effect last month. One small benefit is that I get to keep the in-store exchanges as long as I want without any charges or restocking fees, but who would want to do that at the expense of getting more online rentals?!? A very "smart" move by BB, indeed.. probably made by the new CEO.

Right now, my biggest pet-peeve about BB is that I just wanna be able to return movies to any store I want to! Even if there were a $1 "re-location" fee, I'd probably be fine with that. Man, I think that it costs BB more money to mail out movies, due to postage and cracked DVD's, and all. When BB charged my Paypal account and refused to refund me for the 3 excess charges, I cracked 3 of their DVD's in revenge... and that's probably the maximum amount allowed in a year, I would guess??

Finally, Netflix sucks. I've tried it with them 3 times before. Usually, it takes them 4-5 business days to ship a movie to me. BB does it in 1-2 business days. Most DVD's are in stock, and some Blu-ray movies are actually in stock, if not "short-wait".

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