Two Ways: Is Blockbuster a Wrap?
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Shares of Blockbuster (BBI) plunged at midday after it was reported the world's largest movie-rental chain hired a bankruptcy firm to explore its options.
The Dallas-based Blockbuster, with over 7500 stores worldwide, has retained Kirkland & Ellis LLP to review a number of restructuring options, which could include filling for "pre-packaged" or "pre-arranged bankruptcy." According to Bloomberg, these types of filings are more advanced because outcomes depend on agreements from creditors.
Last November, executives said the company faced challenges refinancing its debt. Blockbuster has also had trouble reinventing itself given the consumer switch to online downloads and mail-in movie services.
Blockbuster shares plunged 77% in today's session.
From the Bull Pen: The bad news for Blockbuster today caused a short squeeze in Netflix (NFLX). Bulls can continue to play Neftlix; a sell stop can be set below $34.
From the Bear Cave: Another company facing a tough turnaround is DISH Network (DISH). See the stock closing below $10 support. Remember to set your buy stop.
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