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: Blockbuster
By Hiawa23 on 4/8/2009 9:08:29 AM , Rating: 2
People think that blocbuster is just a movie store and big deal if they close! Well, my boyfriend works there as an ASM and without his job he wouldn't be able to pay rent.

Wow, I did not think store employees made all that much money. Is this his career? I guess you & he would have to do what the Circuit City employees, or any of the 2mill plus employees did who have lost their jobs in 2009, & we know what that is.

The bottomline is this for me. It's all moot how many people rent movies at Blockbuster who may not have access to the internet cause if you are running business & it aint profitable, then we have seen first hand the last 8 months what should happen, bailoutt nonsense aside. I am not saying I want anyone to lose their jobs but in a free market society, the companies who can't remain profitable ought to go out of business or restructure so they can, or maybe the govt should give them a bailout, too,LOL.

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