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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: Simple Solution...
By tlampen on 4/17/2009 11:47:36 AM , Rating: 2
Eff them for saying no late fees... at our BB store we don't have late fees but if you don't return the movie on time they charge you $40 to buy the movie and then you only get store credit when you return it. complete BS. I wish we had another local video store around but BB put them all out of business a few years back. another Sh!tty thing they are doing is effing their loyal customers by charging them for a "rewards" card. Friken make it free! Sh!t you not, the last time I went in to BB, their pitch to renew my rewards card was that the cost to renew was going to go up to $20 and I should renew it early because it is only $10 now! I hope they go out of business because they deserve it! Maybe it would allow a local Video store to come in and value their loyal customers as aposed to bending them over the counter!


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