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Blockbuster Stock Delisted on NYSE

7 Jul, 2010 By: Erik Gruenwedel

As expected, shares of Blockbuster Inc. July 7 are no longer listed on the New York Stock Exchange (NYSE) and instead are posted on the Over-the-Counter Bulletin Board (OTCBB). The Dallas-based DVD/Blu-ray Disc rental chain’s stock closed July 6 at 15 cents per share.

Stocks listed on NYSE and Nasdaq require a minimum $1-per-share price and market capitalization, both of which Blockbuster had been in violation of and notified about by the NYSE since last year due to the chain's ongoing financial challenges.

Unlike the major trading boards, a stock listed on the OTCBB is typically traded by individual investors over the phone or Internet, and not by financial institutions and mutual funds, among others. Companies on the OTCBB are still required to maintain filings with the Securities and Exchange Commission (SEC), in addition to minimum requirements that are typically easier to meet than those set by the national exchanges.

If Blockbuster undergoes bankruptcy proceedings or other SEC filings, an additional letter will be added to its ticker symbol (blocka.pk) to notify investors.

Blockbuster’s hopes of avoiding delisting shrank after shareholders last month failed to approve a reverse stock split that would have brought share prices above the minimum $1 limit. Shares of Blockbuster had resumed trading July 2 nearly 24 hours after the NYSE first halted activity on the stock. The chain July 1 received a six-week reprieve (until Aug. 13) from creditors regarding a $42.4 million interest payment with creditors holding $675 million in bond debt.

Despite the turmoil, analyst Michael Pachter with Wedbush Morgan Securities in Los Angeles, in a recent note, said Blockbuster’s business (Express kiosks, VOD placement in third-party consumer electronics devices, mobile phones and cable network placement) is improving slightly, despite a challenging future.

Blockbuster shares were down 2 cents to 13 cents per share in heavy mid-morning trading.

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