Blockbuster grapples with creditors, offers to pay in apple cores
After doing away with late fees (and stock dividends), and raising the price of its online rental service, thus ending the online DVD price war, Blockbuster is still having some difficulty paying back its creditors.
From the Motley Fool:
When Blockbuster (NYSE: BBI) decided it would let its customers forgo paying late fees on overdue rentals, perhaps it was hoping that its creditors would be just as generous. No such luck. On Wednesday, Blockbuster announced that it is in negotiations with its creditors. The company insists that it is in compliance with its debt covenants, but it’s clearly been biting off more than it can chew lately, and it’s easy to see why its creditors are getting antsy.
The news sent shares of the leading — and bleeding — video rental store giant dropping faster than box office receipts for Gigli. The stock surrendered 16% of its value Wednesday after having already given up plenty since being spun off by Viacom (NYSE: VIA). Three years ago, the stock peaked at $30. Now, a share of Blockbuster may not be enough to land you a flick rental.
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For more on Blockbuster’s financial woes… here.