Blockbuster Shares Resume Trading Despite Likely Delisting2 Jul, 2010 By: Erik Gruenwedel
Shares of Blockbuster Inc. July 2 resumed trading at 9:30 a.m. EDT, nearly 24 hours after the New York Stock Exchange (NYSE) halted activity on the stock.
Dallas-based Blockbuster, which announced July 1 it had received a six-week reprieve from creditors regarding a $42.4 million interest payment, still faces likely delisting on NYSE after shareholders failed to approve a reverse stock split that would have brought share prices above the minimum $1 limit.
Blockbuster entered into a forbearance agreement until Aug. 13 with creditors holding $675 million in bond debt.
Despite the turmoil, analyst Michael Pachter with Wedbush Morgan Securities in Los Angeles believes Blockbuster’s business (Express kiosks, VOD placement in third party consumer electronics devices, mobile phones and cable networks) is improving slightly, despite a challenging future.
“We continue to believe that upside potential for the stock is limited in the near-term until the company can stabilize its sales, improve profitability and finalize a recapitalization plan,” Pachter wrote in a note.
Indeed, Blockbuster shares were down more than 22% to 18 cents per share in heavy mid-morning trading.