<I>WSJ</I> Story Hurts Top Three Video Chains' Stock Price6 Feb, 2004 By: Holly J. Wagner
A Wall Street Journal news story in which Blockbuster Video CEO John Antioco is quoted as saying “the market dynamics of home video have been significantly and permanently altered” shaved about 2 percent off the share price of the top three video chains Friday.
Investment analyst Fulcrum also downgraded Blockbuster from a neutral to a sell, probably based on speculation that Viacom will announce a Blockbuster spinoff Tuesday when the company reports its quarterly earnings before the bell.
Posters on an online stock market discussion board expect Antioco's talk with analysts later in the day to be a sales pitch for the stock swap Viacom is expected to announce to facilitate the deal.
The Journal article focused on declining rentals in the face of cheap sellthrough DVD, the increasing steam behind other delivery options and ever-present pressure from Netflix and its subscription model.
Blockbuster closed at $16.59, down from $16.87; sputtering Hollywood Video closed at $11.53, down from $11.91; and Movie Gallery closed at $19.11, down from $19.50.