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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RE: Not so simple
By thequoth on 4/7/2009 5:38:54 PM , Rating: 2
You make a good point... Something you may not have considered is that your store(s) may be in a franchise area and the store owner is making the inventory decisions.

Corporate stores in low income areas are usually stocked with more "Standard" than widescreen due to studies that show the lower class demographic will usually choose the one over the other.

RE: Not so simple
By Boze on 4/7/2009 6:59:05 PM , Rating: 1
You mean put simply...

Most poor people could not, and still cannot, afford widescreen televisions. What's also interesting, is that they don't realize they're actually being ripped off. If you rent a "standard" video, you're missing out on, I believe its up to 33% of the picture (maybe some movie gurus can help me out on this, I really don't remember the picture loss going from 2.35:1 to 1.33:1). Or really, they simply lack the common sense to understand that if someone chops off a sixth of your picture on either side, you're technically watching "less" movie. I was a kid when I figured this out, and was buying widescreen DVDs with my allowance, and later on, part-time after school job money.

Maybe there's a reason that the lower class demographic stays lower class... I guess that old adage about common sense not being too common is all too true.

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