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Tom Rex
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I'm semi-retired and currently doing some investing, with some small cap holdings, and mostly larger caps. My investment philosophy is to invest in great companies, or those aspiring to be great, who are innovative, and have some potential. This blog on Seeking Alpha seems to be a good way to... More
  • My Position in Blockbuster, Inc. 6 comments
    Aug 21, 2009 1:39 AM | about stocks: BBI
    Well, having learned a lesson with CASUAL MALE RETAIL (see that post), I decided to try it again, with a company who was currently losing money, because of the economy, but hopefully, had some upside potential, based upon future earnings.

    I hit upon Blockbuster BBI who is now a small cap global company, but has a great recognizable brand name in their industry. They seemed to me to have some advantage over their competitors as to how they can deliver their product, and I liked their kiosks alliance with NCR. That being said, and thought over, I bought some shares!

    The test for me came in their current earning release, which turned out to be somewhat of a negative surprise. The stock went down about a dime, but it's been holding it's own since then, and I'm still holding it. They seem to be going into the next quarter with a stronger balance sheet, but now they need to work on executing their strategies, and producing more profitable sales, while maintaining their balance sheet and cash flow. Here's to them, and those of us who are sticking with them!
    Themes: movies Stocks: BBI
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This post has 6 comments:

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  •  
    If you play this dangerous game, look at the balance sheet first. As Will Rogers reportedly said, "Return OF capital is more important than return ON capital.
    21 Aug 2009, 10:27 AM Reply Like
  •  
    I find (BBI) interesting only becasue of one thing that you have failed to mention. I was in blockbuster last night to rent movies when the manager suggested I look into purchasing a new product. It just came out this week it's a type of cable box you hook up to your TV and can download any movie through the internet for only $3.99. the box cost $99 but you get the first 25 movies free. Do the math this thing practically pays for it self. and all the movies are HD. Since i already have wi-fi in my house and a HD cable it took me 15 till i was watching the newest Nichols Cage movie.
    21 Aug 2009, 10:53 AM Reply Like
  •  
    Stock price is now better than it was on Aug 21st, up from 74 cents to $1.20 today. I believe that this reflects a couple of transactions that are improving the financial picture of the company.


    On Aug 21 10:27 AM Graham and Dodd Investor wrote:

    > If you play this dangerous game, look at the balance sheet first.
    > As Will Rogers reportedly said, "Return OF capital is more important
    > than return ON capital.
    2 Sep 2009, 04:57 PM Reply Like
  •  
    Dear Tom:

    I also combine music with financial analysis. Welcome to my followers.


    On Sep 02 04:57 PM Tom Rex wrote:

    > Stock price is now better than it was on Aug 21st, up from 74 cents
    > to $1.20 today. I believe that this reflects a couple of transactions
    > that are improving the financial picture of the company.
    3 Sep 2009, 01:52 PM Reply Like
  •  
    A couple of comments. I have no current money in BBI but am currently looking at it as a short. You mention that BBI is down "because of the economy". That may be so in the short term, but 2 key competitive points to consider when looking at the long-term: 1) the red box kiosks and 2) net flix. Both are RELATIVELY new phenomenons and both have cost structures that do not rely on having retail locations, i.e. don't have to expand lots of capital on store rents / leases. I think red box will squeeze BBI both on price and convenience significantly. Net Flix will squeeze BBI on convenience. I also haven't mentioned all the On Demand offerings from cable and new streaming movies business models. The bottom line is that as long as BBI has to support its stores, it has a significantly higher cost structure, which means it needs to offer something more than its competitors to garner a premium price or higher transaction volume to be able to compete in the long run. That something more could be the large selection of movies that you can browse in person and get instantaneously- but is that enough to support the cost of the stores?
    26 Sep 2009, 01:13 AM Reply Like
  •  
    Update: I closed my position with BBI on 9/4/09.
    27 Oct 2009, 07:45 AM Reply Like
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