The video rental store declared in a Securities and Exchange Commission filing on Tuesday that it might be forced to file Chapter 11 if cash flows don't improve and it is unable to restructure its debt. Blockbuster reportedly has about $1 billion in debt.
"These factors raise substantial doubt about our ability to continue as a going concern," Blockbuster said in the filing.
As a result, shares of Blockbuster are tanking 26.1% to about 29 cents in morning trading, with investors fearing that a Chapter 11 filing would render common shares worthless.
Still, a voluntary bankruptcy, while painful, may be its only way out, Needham analyst Charles Wolf says.
Blockbuster has provided little confidence that it will be able to recover on its own. Last month the video rental company reported a fourth-quarter loss of $434.9 million, or $2.24 a share, as same-store sales fell almost 16%.
2 comments:
The video store is so empty, you can hear your echo and floor cleaners are nowhere to be seen. They spent their money on bluray disks that are collecting dust and not moving.
some movies are already in the internet..
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