Blockbuster Bankruptcy is Imminent Say Analysts

Posted Mon Aug 16, 2010 at 09:00 AM PDT by Dick Ward

It may be getting close to the end for the once giant rental chain.

Blockbuster has been making some big moves in an attempt to stay in the game. Blockbuster kiosks are popping up all over and unprofitable retail stores are closing. The company even launched a fantastic new game rental service that blows competitors out of the water price wise, even if availability is lacking.

Michael Pachter, an analyst with Wedbush Morgan Securities, suggests that bankruptcy may well be in the works for the company.

The current Blockbuster strategy of touting their earlier access to movies just isn't working, according to Pachter. "Most consumers are motivated by price, are generally unaware of a DVD’s street date, and are likely to discover availability when visiting their local Redbox kiosk, rendering the 28-day head start inconsequential over the long run," he writes.

His colleague Edward Wood agrees. "If they would have been able to avoid bankruptcy, it’s likely they would have been able to come to a recapitalization already."

Home Media Magazine

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