Blockbuster Inc’s (BBI) stock is down a whopping 77% on the day and trading around $.22. It seems that the company has hired a bankruptcy firm to explore the possibility of a reorganization.
Update: Turns out Blockbuster isn’t filing for bankruptcy after all. Damn rumor mill.
From Bloomberg:
Kirkland & Ellis LLP was asked to evaluate restructuring options for the company, which may include a “pre-packaged” or “pre-arranged bankruptcy,” in which much of the restructuring work is completed out of court, the person said. A pre-packaged filing is more advanced than a pre-arranged bankruptcy as it includes agreements from creditors about the outcome of the company’s reorganization.
This just hit and we’ll keep you updated as it develops. Hopefully you didn’t take the plunge on Blockbuster’s movie streaming device; It might not work soon.
Update:
It turns out that Bloomberg’s source wasn’t correct on the purpose of Kirkland & Ellis’s hiring. The company doesn’t intend to file for bankruptcy but simply refinance for more capital. Trading on the stock was eventually halted based on the poor information causing the run on the stock.
From Bloomberg:
“We’ve hired them for refinancing and capital raising initiatives,” said Karen Raskopf, a Blockbuster spokeswoman. “We do not intend to file for bankruptcy.”
Blockbuster is working with Kirkland and Ellis on refinancing, Raskopf said. The company previously announced plans to fund its own operations through the end of 2009 after two of its credit facilities expire this August, she said.
So there you have it. No bankruptcy for Blockbuster right now.
[Thanks for the tip, Patrick]
A DAY OF JOY!!!!!!!!
This company has been one of the shadiest, sleaziest businesses in the US for years.
They threatened studios for exclusive deals in the 90’s, signed an exclusive deal with Weinstein and tried to tell other stores they could not rent Weinstein movies(ever heard of the first sale doct.)., had huge late fee charges, started charging CC for none return of movies after 10 days.
THE WORLD WOULD BE A BETTER PLACE WITHOUT BLOCKBUSTER! Hope that day has arrived.
In regards to late fees, Blockbuster does not create them, you bring them on yourself. Every customer leaves the store fully aware of the due date. And as to charging the credit card, that is the only security the company has to get their product back. Let’s not forget that any rental business is essentially allowing you to BORROW their product for a fee. Not returning that product could be considered theft, and results in loss of money when it is not back on time for the next person to rent. If you didn’t want to purchase the movie, then you should return it, and vice-versa. Why do you need a movie for more than ten days anyhow?
i work for the uk version of the company and yes we have close sevreal shops but we still have work and about late fees its true cusotmers seem to think we should just take of late fees
sam
Victoria, the late fees discussed is about Ballbuster charging customers waaaaay over the original cost of the movie even after the movie was returned until they lost the lawsuit against them. It is sad to say that this is what happens when a company starts to serve their stockholders and forgets about their customers.
Ballbuster today is kind of like Microsoft… no, they are like Walmart… no actually they are just arrogant thinking we actually need them in our daily lives… BB lost their magic when they dropped Video from their name because they forgot about the movies and starting thinking more about the money, money, money… but Ballbuster is sooo 90s when we were still renting VHS tapes… they will either turn out like Circuit City or tacky like 7-Eleven.
You are right both my husband and I worked for them. It was hell. I actually went to Hollywood Video and worked there. Hollywood video is a much better company. I can’t wait until they go under. I am going to party when it happens.
Idiot, thousands out of work and you’re celebrating. Grow up
oh wow thousands of people Out of Work… Wake up Gary… these people are either wage slaves or our just part-timers while going to school. Cheap Ballbuster jobs are a dime a dozen… Just like working at Target, Walmart, any movie theater, Starbuck’s, McDonald’s, Burger King… But hey that’s the American way… the store manager makes 100K or more while everyone else $10… an hour.
Managers make 100K a year? Are you f@$%&ing nuts! On what planet, get your facts straight, dumb a$$.
I said THE store manager… not “managers”… sometimes titles get “confused” like calling the person cleaning up the “maintenance engineer”.
plus I was merely setting up a lyrical comparison not a statistical study… 100K to $10 an hour sounds better than $65,766 annually (without regard for hours worked) versus $9.79 an hour part time bringing in roughly $13,978 annually.
I am very glad to have your comments on my post. Especially the fancy exclamation symbols… very creative!!!
I know for a fact, ( my husband) manager, makes about a quarter of your dumb estimate for his position!!!
100K? WHERE???????????PLEASE TELL US!
The managers make how much, you say????
Are you insane? My husband, manager of a local BB, makes around 2K, a mth. Do the basic math.
Why? does he stay? The market is slicing back on management, left and right…
He HAS to “run” the entire store, with no help, six hours a day! ( Not another employee shows up until 3PM.)
He is miserable, but worried about not having a job. ( He believes in paying the bills.)
100K?!?! Sheesh, I wish!!!
I would love to hear any news, opinions, comments, ( yes, even rumours) on anything relating to BB.
Sincerely,
W.N ( FL.)
I am an employee in the UK and am more than a little concerned. How will this affect us over here? I guess I’d better start looking for another job…
hey matt meet on face book mate us blockbusters have to keep togather which one do you work at me is in london
It already is. I worked in a shop and they shut us down cos they couldnt be bothered paying the rent anymore. I’ve been transferred now but others that have been transferred to another shop are now goin through it again as theyre closing another one! Its going down the pan, you should get out while you can.
Gary,
Thousands of good independent video stores had to close thanks to Blockbuster SHADY deals.
I was one.
We did win a class action suit against Blockbuster and the Studios for the shady deals whoever the lawyers took about 80% of the settlement leaving the stores in the suit with about $20000 each out of $25 Million settlement.
I feel for those that lose their jobs from the company,but more have lost jobs in recent years because of how Blockbuster ruined the video business.
AND EVERY PERSON IN THE VIDEO BUSINESS WILL TELL YOU THE SAME THING!
You are a idiot. Blockbuster closed you down so lets blame it on them. You could not compete. Your own fault.
So the jobs at Blockbuster are more important than the jobs of the people that were at independent stores? It’s not just ‘blaming’ them if they were in fact responsible for the closing down of said stores. Of course, a ‘big’ company is MUCH more important that thousands of smaller companies, apparently. I’d call you an idiot, but I think you probably hear it enough by now.
Exactly that’s point… the little shops closed because Blockbuster Video gave people the excitement and magic of renting movie without hassles… they made shopping for VHS movies fun and easy… Rent Blockbuster Video and go home happy… Then DVD came and the older video stores lost touch… Blockbuster Video joined the dark side and the Emperor said you will now be known as Ballbuster because you now are the only kid on the Block… buster. And they want to get your five dollars for some crappy movie called FanBoys which is some stupid Ballbuster exclusive… that’s lamer than this comment. farewell to the blue and gold… Long live the Red, White and Black!!!
I agree with shelby…I used to own a video store called Hollywood Home Video and I sold it almost 2 years ago now because it was not worth my time working 80 hours a week…Smaller hometown video stores do not do the advertising or merchandising changes that the large corporations live by…THAT is why the smaller businesses are going under…oh that and the increasing charges in utilities, shipping, gas, heat, wages, and should I even mention taxes?…THIS is why smaller mom and pop video stores are going under…Its not blockbusters fault…EVERY business has competition…it all matters how you run your business…is it blockbusters fault your customers CHOSE to go to them instead?
The only problem with the small businesses is that, even with Blockbuster out of the picture, I don’t think they would survive with Netflix and Gamefly, let alone the piracy out there.
Even bigger idiot you lost out to corporates and lawyers and in response you want to see workers out of work to compensate for malpractice at the top. Do you think those at the top will not have massive payouts and will suffer, of course not. i apologise for calling you an idiot…you’re lack of compassion and intelligence is plain. I should have written Donkey!
Nobody in America had compassion for the Independent stores or even Hollywood Video when they had to close due to Blockbuster.
Blockbuster was getting movies for under $5 a piece while everyone else was paying $19.
Blockbuster has been struggling like everyone else ever since the UNFAIR TRADE PRACTICE suit was settled and they had to pay what everyone else does.
AGAIN I FEEL FOR ALL THOSE VICTIMS OF THE CORPORATIONS ACTIONS.
Which is much more than I can say for the way they felt about any of us.
The arrogance of Blockbuster CEO over the years has left a bitter taste is some peoples mouth.
He said things like “I would never be caught dead in an independent store”. He is the one who needs to grow up.
I may be in the wrong here,but I am speaking for EVERY independent owner in America that was forced to close because of UNFAIR TRADE and not because of a bigger,better model.
Its not an UNFAIR TRADE when you just cant compete with your competitors…
It’s call Antitrust. Look it up. It’s about unfair business practices. It is, in fact, a crime.
face it “you are either a 1 or a 0… alive or dead” Tim Robbins, Antitrust
If Blockbuster has such a winning business model why do they need to borrow money to run their business? Maybe the only economies of scale are borrowing power and selling paper(stocks). Maybe the giant megacorporation is a farce and only create unfair competition for real businesses that actually make their money from their line of business and not by going into a never ending cycle of debt have only one evolutionary step for their business plan, bankruptcy!
every company borrows money, its the way of the world!
Eye for an eye? “A day of Joy”. Enjoy your day as more misery is heaped on working class families all over the world. I’m no lover of the way the company behaves but I dont see thousands out of work as a reason for joy. Good luck in the bitter selfish world you inhabit, I’m sure you’ll fit in well.
Folks, they will deny filing Chapter 11 till about one minute before they do it, Circuit City did and all companies do. The minute they announce it their credit lines are frozen and their stock goes in the toilet. I am sure they are draining off what’s left, BLOCK BUSTER will close down after they file.
This day and age, losing your job is just about as given as taxes.
I am from Houston, we have seen Enron and now Stanford screw thousands of employees out of not only jobs but retirement. You can’t even look out for yourself because corporate America is stabbing you in the back. Maybe if the government would have come to the aid of smaller businesses earlier then we would be in this jam.
I feel for anyone that losses a job because of big wig greed,but people move on. I DID.
My store was making over 100,000 profit a year competing with BB and then 1998 came with the “WE GUARANTEE IT TO BE IN STOCK” campaign because they did the under the table deals giving me 1 copy for there every 4 because of pricing.
I FEEL NO REMORSE FOR THE COMPANY GOING BELLY UP LIKE THEY DID TO ME. I HAD TO LAYOFF GOOD PEOPLE AS WELL. People I cared about and just a random employee like BB will do.
It seems as though BB is safe FOR NOW.
The brick and mortar video rental days are dead and BB will continue its slide.
I would hope ANY and EVERY employee is taking advantage of this while they still have there job and start to look for a new one.
BLOCKBUSTER WILL FILE FOR BANKRUPTCY. Maybe not this week,this month, or even this year but it is coming. Just listen to the experts and look at the debt.
If people knew the Titantic was going down and they had the chance to get off before it happened then they would have so why don’t you.
Good Luck all employees of BB and please read the writing on the wall.
I have to agree with just about everything being said here.
Just read this:
As of Oct. 5, Blockbuster had $95 million in cash and $615 million in long-term debt, according to filings with the Securities and Exchange Commission. About $370 million of the debt is due in August, primarily with JPMorgan Chase.
How can a company get out of this hole with the economy of today??
By getting everyone to pay them $5 to get their fix.
Hmm $5 hit… or five dollar slap… in yo face.
Maybe they should take a lesson from Subway… Five… Five dollar week long… Come in and get one movie (that you might not even like) for $5 for a whole week… if you like the used copy so much you can keep it for just $16.99 more…
Five… $5 dollar week long…
My wife has been a manager at a local Blockbuster for almost a decade now. And I’m shuddering at the thought of losing medical benefits, a bi-weekly check, and what stability the job provides. And the stores are doing everything they possibly can to survive from running skeleton crew, killing any bonuses, and cutting back on the amount of inventory ordered. For those of you cheering for the downfall think of everyone who needs Blockbuster just to survive.
Dont worry donovan…Blockbuster will NOT go out of business anytime soon! Even if they did declare bankcruptcy (Which wont happen soon) it would be years before they actually closed…
Bankruptcy?
How will they compete with the new vending machine that disperses a movie at a cost of $1 using your Debit/CC?
As Paul Harvey would have said, “Good Day”
vending machines, self check outs, robots, technology its self, will screw us all. “good day”
Although Blockbuster is not filing bankruptcy, it will be inevitable as they are not able to compete with the on-demand and video streaming services available. I am being charged $5.25 now for each movie rental, but $18/month with netflix and get unlimited movies in the mail and streamed over my XBox 360. Just like Circuit City has fallen victim to online retailers offering the same products for half the price (in some cases), Blockbuster’s (and every other video rental outlet) days are numbered.
Blockbuster is going to announce it quarterly report on March 19th which will show you just how bad they are doing.
Downloading,pirating,vending machines,online have caught up to in store chains.
I have not paid for a dvd in 2 years as easy as it is to download excellent quality and burn it. How many music stores do you see these days? DVD are becoming the same way as CD’s.
I agree that it is a matter of time before BB will not have a single standing store. Online or streaming may be a different story.
i work at blockbuster in aurora, and the store has a haed time competing with its bigger stores,and now you can rent, online and in non video stores thinks to redbox, i say good day.
uk blockbuster is self owned not controlled by the us branch pewwwww
The UK is not self owned, it is an arm of the US. The crux of the matter is that if Blockbuster dont refinance these two huge loans (epsecially in the present market place and who wants to loan 450M Dollars to a company that hasnt made any cash profit for years) So inlight of that and how jittery banks are to loan huge amounts of money, do you really think that Kirkland & Ellis bankrupsy lawyers will really be able to come up with a plan to refinance such a huge amount.
Blockbuster have kicked themselves in the foot and stepping on the little people will finally come and bite you on the arse.
The reason Independants dont survive in the UK, is not because of poor business practices by shop owners but the amount of money a rental copy costs these days and how many turns that needs to make a profit ! and the answer is too many. Blockbuster drove in the two tier pricing system from the US and when you can pay
£12-£15 for a retail copy, the rental copy will cost £25 up….. is that fair for a struggling industry? No its not and Blockbuster forced that! in the UK, all they have to pay is a percentage of what they rent, not actually pay up front for there stock! and the independant was never given the same option, Blockbuster became big brother and that was that.
So for all those 1000’s of independant stores that have gone to the wall because Blockbuster got greedy, they deserve everything they get… but I do feel sorry for the employees, after all its not there fault, they just have to go with it.
My prediction is that they won’t last beyond February 2010.
Wow!! What irony… “the UK is not self-owned, it is an arm of the US.” We’ve come a long way from 1776.
I used to work at BB and just quit. I feel bad for the employees that will lose their jobs when the business goes under, but at the same time, I am grateful that I no longer work there. I was treated like s**t by my store manager, reported it numerous times and nothing was ever done about it. He would leave 2 hours earlier then he was supposed to and would ask myself or another manager to clock him out at the time that he was SUPPOSED to leave at. There were many other things that I won’t get into,but it’s been a HORRIBLE company to work for. They lie to their customers (I think I was one of the very few honest employees that we had working there) and treat them awful as well..
What’s wrong with your boss leaving early? Sounds great to me! As a Blockbuster customer I cannot ever recall being lied to. Lied to about what???
I like the rent-by-mail option even though the turnaround is getting slower. I wish some of the older titles didn’t have long wait times but being able to search titles by actor, director or genre is incredible. If not for the store exchange I would go back to Netflix.
It was wrong because he was LYING about the hours that he was actually there..Therefore ripping the company off for hours that were not really worked. As for lying to customers, it happens everyday buddy. Would you honestly know if one of the employees were lying to you? I highly doubt that! We had a manager lie about the late fees that were owed (to a customer that he did not like) He would check their movies in a week later on purpose to rack up the fees. (Yes, I reported him, and surprise, surprise, he is STILL working there!!) There are many other numerous things that are done there that NONE of the customers are aware of. Why do you think that I finally quit? Why would I want to continue to work for such a shady company? I use RedBox now, as do all of my friends and family.
Blocbuster is ridiculous. I use to work for the DC and it was the most pathetic part of my life. After the big management changed, thats when everything started going sour for BB. They started laying off people after people to turn around and hire a lot of more people. Then do another lay off, i guess trying to save money. There are so many other sources in the world that sells cheaper videos and rentals. I think if their product wasnt so expensive they will have a better bank account, and if management was more wiser. The sad part is, is that they lay off all of the wrong people, and the people thats actually hurting the company has more job security than a contractor
It’s only a matter of time before Blockbuster goes under. I worked for them until recently, and there were so many negative changes that the staff/stores had to undergo: cutting hours, supply ordering freezes, extreme stress on staff to sell sell sell until they vomit sales pitches, threats from district managers on conference calls, promotion/hiring freezes for new employees, freezes on shipping movies between stores, the list goes on… glad I got out while I still could. Good luck BBV, you’ll need it!
I just took a store in missouri and i must say we have a very loyal customer base. I Think that there is way to may people that hold this company to a high standard for it to just fail. I also think that its employees should stop giving up so fast. I do hope that the company figures out a direction and just sticks to it. I do hope that the company pays more attention to to detail with its workers. I just have to say that even though people dont have jobs right now. Even though this company is in some hardships i do believe in it or i would not have taken this on. Oh and by the way my store is in the city with the highest unemployment rate in the state and we are STILL pumping the rentals out!!!
…and that’s why you are pumping them out. Everyone is unemployed… nothing to do but rent a movie.
This has been mentioned earlier and I think it rings hard. Downloading,internet renting,red boxes,and streaming through tv are leaving walk in stores in the dust. Blockbuster is so far in debt and not making money that it just seems like they are dragging out the process. What can they do to get a customer to return from all of the above mentioned ways of getting dvd’s? Just track there stock and news updates and tell me how they continue without profit coming in and a huge debt hanging over them.
The Blockbuster down the street from me has two red boxes within 200 yards of its doors . They now close at 9:00pm on weekdays and I stopped using them like many others in my area.
Ballbuster Video will continue to operate as long as kids continue to cough their lunch money for the big bad bully.
Looks like a great time to buy. The stores are continuing to remain popular.
Why would anyone use BB after discovering the Red Box? I have at least 3 closer to me than my BB store which is only 5 minutes away. The movies are a dollar, I can reserve them online, and I don’t have to deal with some cheesy kid trying to sell me overpriced candy.
Totally!!! I mean what ever happen to the good ol’ would you like fries with that? Now we got would you like some overpriced candy with that?
How can BB survive, think about it. They have an outdated business model, they have mounting debt and very little cash reserve left. I used to go to BB alot when i was younger but I haven’t been there in years. Red box a dollar a dvd, BB $5.25 a dvd, on demand 3.50 a video and I dont even leave my couch. They will file for bankruptcy by next year, they will have to liquadate there assests. No bank is going to allow them to file chapter 11, chapter 7 is there only option. I can’t say that i will miss them they deserve what they get.
Ballbuster’s last movie rental will be “Chapter 7 is the only option” muhahaha
i worked at blockbuster for just under 2 years, and honestly it was the best job i’ve ever had. but before u go “you must be in high school” or anything like that, let me just say, it was NOT the best job in terms of company policies or so-called “sales”. The people i worked with and the customers there were so cool. I’ve had several jobs over the years, and this was the only one i really enjoyed going to. if the chain does indeed go under, i will be sad for them.
i cant wait for blockbuster to tank and go under, redbox is the future and a dollar a night is how it should be not 3.50 if any of you morons disagree with that then you can suck my dick..