Blockbuster Shareholders to Vote on Reverse Stock Split29 Mar, 2010 By: Erik Gruenwedel
When Blockbuster holds its annual shareholder meeting May 26 in Dallas, shareholders will be asked to approve a reverse stock split, among other measures.
Blockbuster, which earlier this month said it faces bankruptcy unless it can obtain breaks from lenders and studios, said the New York Stock Exchange informed it that its market capitalization had fallen below $75 million over a 30-day trading period, in violation of the board’s rules.
As a result, the Dallas-based DVD rental giant would seek to artificially inflate the value of its penny stocks (about 28 cents per share) by reducing the number Class ‘A’ and ‘B’ shares outstanding.
The company now has 45 days to bring the value above $75 million or face delisting from the trading board.
Warner Home Video last week restructured its distribution deal with Blockbuster, which resulted in the chain being the only multiplatform distributor able to offer new-release Warner titles on street date.