Blockbuster Stock Price Jumps on News of Foreign Sale, CEO Buy22 Nov, 2006 By: Erik Gruenwedel
Blockbuster Inc. stock surpassed the $5-per-share mark Nov. 22 for the first time in 52 weeks, following reports the Dallas-based rental giant would sell its 128-store Taiwanese operations, including 39 franchise stores.
The surge also followed Blockbuster chairman and CEO John Antioco's Nov. 21 purchase of 220,000 shares of common stock for more than $1 million — a buy that upped the executive's common stock holdings 20% to 1.1 million shares.
A Blockbuster spokesperson confirmed that a regulatory filing with respect to a potential deal with a Taiwan Web portal had been sent to the Taiwan Fair Trade Commission. “Beyond this, there are no other details we can provide,” said spokesperson Randy Hargrove.
Analyst Michael Pachter, of Wedbush Morgan Securities in Los Angeles, said the stock price rebound was more a result of the possible Taiwan divestiture and recent rev-share agreement with The Weinstein Co., than Antioco's stock purchase.
“It just shows that they are starting to actually execute on their plan to divest of non-core assets,” Pachter said. “I think that is really [why the stock has gone up].”
He doubted Weinsteins' movie line-up was big enough to sway market dynamics, but believed it was a signal to more exclusive deals with studios in the future.