Blockbuster, Inc. (BBI)

jsikorsk (62.74) Submitted: 4/15/08 3:24 PM : Start Price: $2.77 BBI Score: 22.74

As I stood infront of the Redbox across the street from the local Blockbuster, I tried to remember the last time I have been to Blockbuster. Without radical readjustment in its business model, BBI will not exist as we know it in five years.

Yesterday, BBI announced a hostile takeover bid for Circuit City. Anyone remember the AOL-Time Warner synergies and how much wealth was created for shareholders? So here we have a company who cannot manage itself well right now trying to buy a better company in a business it knows nothing about and cannot afford. Does this sound like a winning deal?

Netflix, Redbox, On Demand, networks posting shows on their own websites free, etc. Any one of these is not enough to sink BBI, but together they will crush it. They are cheaper, faster, and more convenient. Even BBI's Toatal Access tried to compete with Netflix. Arguably, it was a much better deal for the consumer. But it is a money-looser for BBI. It is just not sustainable.

So, overall, I see no future for this company. It continues to loose money and take half-hearted massive attempts to dig itself out of the comfortable hole it has been in for years.

Report this Post Replies: 0 | Reply | Permalink