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.  

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: Don't forget Red Box
By kmmatney on 4/7/2009 7:56:25 PM , Rating: 2
Your doing the RedBox thing all wrong. First, you can reserve the movie online, so you can pretty much garauntee that the movie will be there. Second, if you can't watch it the day you rent, just rip it and watch it at your convenience. You have until 9:00 PM the next day to return, and you can return it to any location. MNost people will have locations near both home and work, so it's pretty flexible.

The nice thing about RedBox is that you can take a break from watching movies, without penalty (e.g. you can go 4 weeks without watching anything, and not feel like your wasting money).

All RedBox needs is:

- Bluray movies. Apparently they have these, but not near me.
- They need special return slots, so you can return movies without waiting for people taking forever selecting their movie. The Walmart near me has 2 redboxes, which is nice as you usually don't have to wait.

"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch
Related Articles

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki