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A Desperate Blockbuster Tries Something Else

What I don't understand is why everyone is so quick to say that BBI is done and NFLX is killing them. Last I checked BBI had revenue of well over $4 Billion with a capital B and little NFLX just had revenues of a little over $1. That makes BBI about 4 times their size and yet all the analyst want to declare BBI the runner up!

To many uninformed and lazy investors it may look like BBI has embarked upon some fragmented desperation moves to save itself but that's because they don't really have a clue about the business to begin with. First, I suggest that you read a transcript from the CC call or listen to a replay there are some clues in there. They would not have embarked upon this venture to begin with unless Icahn had already agreed to fund the acquisition. It sure must be nice to have a Billionaire in your back pocket!

BBI needs the purcashing scale that CC brings for personal electronics. They are not trying to become an Apple store so you can alleviate yourself of that fantasy right now. Everybody is always trying to say that this thing is the next big thin or just like that company. I don't know how many clown analyst popped into my office trying to tell me that KKK was the next SBUX!

Anyway, the CC acquisition gives BBI better distribution for their current inventory. Anybody that knows the company understands this aspect of their business sucks. It gives them economy in purchasing. They should be able to offer products in their stores that they can't economically offer today. They should be able to close some locations and relocate the movie rentals into a CC driving traffic to those stores. They may also be able to off some additional electronics out of BBI locations and close CC locations where it is not economical.

Anyone curious what the new stores are going to look like should go look at the location in Frisco Texas near Lebanon and Legacy.