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Evaluation Of Blockbuster Inc. (Symb: Bloaq)

1366 words - 6 pages

Evaluation of Blockbuster Inc. (SYMB:BLOAQ)
Evaluation of Blockbuster Inc. (SYMB:BLOAQ)
1.0 Introduction
Blockbuster Inc., a darling of the late 1980’s and early 1990’s and a favorite pick among analysts across the spectrum of investment companies is facing a crisis. The company was listed in the NYSE under the symbol BBI until 2009 when the share price no longer met the requirements of NYSE listing and was relegated to pink sheet and now trades under the symbol BLOAQ and currently trading around $0.05 per share compared to nearly $30.00 in early 2002. Blockbuster is currently operating under Chapter 11 Bankruptcy protection.

1.1 About The Company
Blockbuster ...view middle of the document...

Today, the company operates and on-line video rental service, over the mail, rental kiosks at groceries and supermarkets and its traditional brick-and-mortar operation.

2.0 Competitive landscape – by delivery method
Before the proliferation of on-demand cable TV stations, high-speed internet and over the mail video rental, Blockbuster was the dominant movie and video game rental distributor. As a brick-and-mortar operation Blockbuster faced little competition from mom-and-pop stores with the closes competitor being Hollywood Video chain of stores. Today, Blockbuster faces challenges in three segments - video rental kiosk installations in supermarkets, malls and drugstores, on-line and over the mail through flat-fee or per view basis, and brick-and-mortar stores. Blockbuster has three methods of delivering entertainment to the customers.
1. Physical Delivery
a. In-store
b. By mail
c. Vending Kiosks
2. Digital Delivery
a. Download to computer
b. Delivery through set top boxes and portable media such as iPhone
Figure 1. Market participation map
|Symbol |Company name |
| |2009(1) |2008 |2007(2) |2006(3) |2005(4) |
| |(In millions, except per share amounts) |
|Statement of Operations Data: | | | | | |
|Revenues | $ 4,062.40 | $ 5,065.40 | $ 5,314.00 | $ 5,337.60 | $ 5,551.10 |
|Gross profit | $ 2,178.20 | $ 2,630.30 | $ 2,773.70 | $ 2,959.00 | $ 3,082.00 |
|Impairment of goodwill and other long-lived assets(5) | $ 369.20 | $ 435.00 | $ 2.20 | $ 5.10| $ 341.90 |
|Operating income (loss)(6) | $ (355.20) | $ (304.30) | $ 27.30 | $ 60.30 | $ (396.90) |
|Income (loss) from continuing operations | $ (517.60) | $ (382.90) | $ (84.20) | $ 53.10 | $ (555.40) |
|Income (loss) per common share from continuing |  |  |  |  |  |
|operations—basic and diluted | $ (2.72) | $ (2.06) | $ (0.50) | $ 0.22| $ (3.02) |
|Income (loss) from discontinued operations, net of tax(7) | $ (40.60) | $ 8.80 | $ ...

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