Blockbuster Streaming Service to challenge Netflix
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    Stock Alert for Blockbuster Inc. (BLOAQ)

    Blockbuster Inc.  (BLOAQ) is a global provider of in-home movie and game entertainment, with over 5,000 stores throughout the Americas, Europe, Asia and Australia. The Company provides customers with convenient access to media entertainment anywhere, any way they want it – whether in-store, by-mail, through vending kiosks or digitally to their homes and mobile devices. With a highly recognized brand and a library of more than 125,000 movie and game titles, the Company leverages its multichannel presence to serve nearly 47 million global customers annually. In 2011, the Company was purchased by DISH Network Corp., through section 363 of the U.S. Bankruptcy Code, following the filing of Chapter 11 Bankruptcy in September, 2010.

    Share Statistics (23-Sept-11)   FY

    2009

    FY

    2010

    %

    Chg

    Q4

    2009

    Q4

    2010

    %

    Chg

    Symbol BLOAQ Revenue, $Mn 4,051.10 3,240.70 -20.0% 1,072.90 776.40 -27.6%
    Current price $0.09 Gross marg. 53.1% 54.1% 1.9% 49.3% 52.2% 5.9%
    52wk Range: $0.03-$0.28 Oper. margin -6.2%
    Avg Vol (3m): 2,732,590 Net margin 13.8% 8.3% -39.9% -40.5% -10.4% -74.3%
    Market Cap. 21.72M              
    Shares Outstanding 219.37M EPS, $ -1.37 -1.04 -24.9% -0.98 -0.17 -82.7%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of BLOAQ have gained 152.9% in the past five days; 141.6% in the last month; and 279.3% year-to-date.

    Shares of the global media entertainment provider, which exited Chapter 11 protection earlier this year after being purchased by DISH Network (NASDAQ: DISH) for $320 million, traded as much as 58% higher Friday, extending its recent rally.

    Over 24 million shares have traded hands for the day, compared with the stock’s 10-day average volume of 3.53 million shares. In the past 52 weeks, shares of BLOAQ have traded between a low of $0.03 and a high of $0.28.  It is currently trading above its 50-day moving average of $0.08 and above its 200-day moving average of $0.07. Market capitalization currently stands at $21.72  million and it has 219.37 million outstanding shares.

    DISH shares were also on the rise amid reports that it will unveil a new Blockbuster-branded streaming service that could challenge Netflix’s (NASDAQ: NFLX) flat-fee, all-you-can-watch service.  Many observers previously speculated that the reason the satellite TV company paid $320 million back in April to acquire Blockbuster out of bankruptcy was its intent to unveil a streaming service. Shares have risen 0.8% in the last five days.

    NFLX shares, on other hand, have recently taken a beating on news that would split its services following its revised guidance and expected subscriber losses for the third quarter. Many observers believe now is a good time for Dish to launch its streaming service.

    According to a Bloomberg report, which cited a source familiar with DISH’s plans, the new service could also include on-demand Blockbuster movies that Dish satellite customers can watch on television sets, or possibly pair the new streaming service with Blockbuster’s existing mail-order and in-store DVD rentals.

    Source:

    http://www.bloomberg.com/news/2011-09-02/dish-said-to-plan-blockbuster-rival-to-netflix.html

    http://www.forbes.com/sites/greatspeculations/2011/09/21/netflix-drops-dish-network-pops-on-qwikster-plan/?partner=yahootix

    Financial Strength (23-Sept-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 1.08 1.09 1.11 0.78
    Current Ratio (MRQ) 1.52 1.62 1.33 1.15
    LT Debt to Equity (MRQ) 24.08 55.38 108.85
    Total Debt to Equity (MRQ) 62.89 95.29 145.47
    Interest Coverage (TTM) -3.46 1.56 0.47 23.52

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    Analyst Recommendations and Revisions

    1-5 Linear Scale

    Current

    1 Month
    Ago

    2 Month
    Ago

    3 Month
    Ago

    (1) BUY 0 0 0 0
    (2) OUTPERFORM 0 0 0 0
    (3) HOLD 0 0 0 0
    (4) UNDERPERFORM 0 0 0 0
    (5) SELL 0 0 0 0
    No Opinion 1 1 1 1
     
    Mean Rating 0.00 0.00 0.00 0.00

    Source: http://www.reuters.com/finance/stocks/analyst?symbol=BLOAQ.PK

    Technical Analysis

    Source: http://stockcharts.com

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Sept23-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Movie Gallery Inc. MVGRQ 0.0025 93.58K n/a n/a n/a n/a
    Coinstar Inc. CSTR 41.96 1.29B 13.58 11.16 0.72 0.62
    Netflix Inc. NFLX 130.33 6.85B 28.90 19.60 2.09 1.54
    Specialty Retail, Other Median       15.79 n/a 0.65 n/a
    Blockbuster Inc. BLOAQ 0.10 21.32M n/a n/a 0.00 0.00

    Source: Thomson Financial

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