Coinstar Shareholders Approve ‘Outerwall’ Name Change28 Jun, 2013 By: Erik Gruenwedel, Chris Tribbey
B. Riley & Co. analyst Eric Wold expects Redbox to account for less than 50% of corporate revenue by 2018
Say goodbye to Coinstar Inc. The corporate name synonymous with the green coin trading kiosks found in supermarkets and parent to Redbox, among other vending brands, will officially change its corporate name to Outerwall Inc. following a June 27 vote of approval by shareholders.
Coinstar’s ticker symbol will change from “CSTR” to “OUTR” on July 2.
When the name change was first announced, Coinstar said Outerwall was selected as an umbrella corporate brand that encompasses the company's current operations and provides a platform for future opportunities. It said the name is intended to signify innovation and pushing the walls of retail out into a new dimension through current and future automated retail solutions.
B. Riley & Co. analyst Eric Wold, who has covered Coinstar for nine years, said the company needed a corporate name that represents its diverse product portfolio. Wold’s only concern is that Outerwall is reminiscent of a failed previous corporate moniker.
“[There is] similarity to the ‘4th Wall’ strategy from the old management team that led the company into making questionable acquisitions that did not have a lot of synergies or technological advancements,” Wold said in an email. “However, the name is only the corporate name and will have little to no impact on the strength of the individual product lines.”
Indeed, Wold said Coinstar’s coin-counting machines represent just 12% of its 2013 revenue projection and the company continues to develop and invest in additional automated retail kiosk concepts.
In fact, based on previously published projections, which include continued market share gains for Redbox, the launch of new automated kiosk concepts annually as well as the acquisition of a majority stake in ecoATM, Wold projects that over the next five years, Redbox will decline from 87% of Coinstar’s annual revenue to approximately 47% by 2018.
“Further demonstrating, in our opinion, the diversification efforts currently in place with management,” Wodl wrote in a June 28 note.