Blockbuster: Battling Bankruptcy, Dissident Shareholder Joins the Board
Blockbuster stock struggled Thursday, falling more than 12 percent at one point, now hovering around a quarter. As the company struggles to find a solution to deal with its looming debt and struggling business model, it added a dissident shareholder to its board of directors. At the company's shareholder meeting, Blockbuster's board decided to add Gregory Meyer to the board without an election, ending Meyer's long campaign to join the board and implement changes.
Meyer owns less than one percent of Blockbuster stock, but has experience in the business — he sold a kiosk company he founded, DVDXpress, to Coinstar. Coinstar's Redbox units now runs 25,000 kiosks that rent DVDs for $1 a day, stealing Blockbuster's business. Blockbuster is tackling this rival head-on by getting into the very same business — it's on track to add an additional 6,000 kiosks, to have 10,000 kiosks by the end of the year.
At today's meeting Blockbuster demo-ed some online digital distribution options for shareholders, an attempt to compete with Netflix . But will Blockbuster even be around long enough for its kiosks and online distribution to matter?
What's Blockbuster going to do about its $900 million in debt? The company was hoping to have a recapitalization plan finalized by today's meeting, to present to shareholders, but couldn't complete it in time for the meeting. The company has a $42 million debt payment due July 1.
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