Gallery Stocks Plunge Further8 Oct, 2007 By: Erik Gruenwedel
Stock valuations for beleaguered Movie Gallery Inc. Oct. 8 plummeted more than 40% as last-gasp investors heeded last Friday's report by The Wall Street Journal that said the No. 2 video rental chain would file for bankruptcy this month.
Already trading below $1, Dothan, Ala.-based Gallery's stock closed down 19 cents to 26 cents on a volume of nearly 10 million shares traded.
The Journal reported that bond and second lien holders were restructuring collectively about $500 million in debt with Gallery in exchange for shares of common stock of the company should it file for, and emerge from, bankruptcy.
Gallery acquired $1.1 of its current $1.2 billion in debt following the 2005 purchase of Hollywood Video. The company's debt includes $322 million in bonds, $175 million in second-lien debt and $600 million in first-lien debt.