Blockbuster continues its downward spiral as it has been suspended from trading and forced to delist from the NYSE effective next Wednesday. Currently trading at $0.18 per share, Blockbuster failed to win majority stockholder approval last week for a reverse stock split that would have brought its stock above the $1 threshold and back in compliance with the NYSE. In a move that delays any immediate bankruptcy proceedings, Blockbuster was given a one-month reprieve on debt payments that the movie rental giant failed to pay on July 1st. The creditors, which hold nearly $440 million of Blockbuster’s whopping $920 million of debt, agreed to postpone any “remedies” until August 13th. In the upcoming weeks, Blockbuster is hoping to negotiate with partners to get a quick infusion of cash by possibly converting some bondholders to equity investors. This quick fix may be a little too little, a little too late and may only delay the inevitable bankruptcy as Blockbuster shows no signs of becoming profitable in the foreseeable future. More →
Plagued by sluggish sales and a dreadfully low stock price, Circuit City has been in a downward spiral. Last week it was a notice of non-compliance from the NYSE threatening to remove the listing because its stock has been sitting at well below $1.00 for more than a month. This week it is the inevitable cutbacks which have taken the form of layoffs and store closings. According to the Consumerist website, Circuit City is set to announce the closing of 155 stores nationwide today, which is about 20% of its entire retail chain. Many stores held emergency meetings over the weekend to discuss the potential closings and reorganization of the company. According to letters handed out to employees at stores that are slated for closing, all employees will be terminated on or before December 31st, 2008, possibly without any form of severance pay. Dreadful news for Circuit City employees. A list of stores that are on the chopping block has not been publicly released but rumors suggest that those stores set to close are no longer appearing on Circuit City’s store locator. More details about liquidation sales and a full list of stores that are closing should be coming later today – our condolences in advance to everyone affected by this terrible news.
[Via The Consumerist]
UPDATE: The official release just hit, along the closure list and some more info. Again, we can’t express enough how sorry we are for those affected – best of luck to you all.