Blockbuster's Stay of Execution

It now appears that Blockbuster CEO Jim Keyes' interview with the Los Angeles Times, which we quoted in April, was either falsely positive or a delaying tactic to stave off bankruptcy.

Keyes had said, in part, that "Blockbuster can restore consumer relevance because we do carry new releases, and in fact our recent agreement give us the privilege of day-and-date content across our channel, which we believe is a strong competitive advantage."

Consider that statement inconsequential, as the once-mighty video giant's financial straits are out in the open. It turns out (spoiler alert!) things couldn't get much worse for the sinking retailer, which was spoofed by The Onion for its orginal video rental model.

Yesterday, according to Reuters, Blockbuster missed its debt payments of about $440 million, but its creditors agreed to extend the due date to August 13. In the meantime, Blockbuster began the process of delisting itself from the New York Stock Exchange. At the market's close yesterday, Blockbuster's share price was down to 23 cents.

While Blockbuster is scrambling to find cash, Michael Pachter, an analyst with Wedbush Securities, voiced what many analysts see as inevitable, telling Reuters: "There's nothing on the horizon that makes it look like Blockbuster is going to be more profitable."

We recently analyzed some of the primary reasons behind Blockbuster's downfall in the dramatically changing video on demand marketplace. It seems more than likely that a Blockbuster bankruptcy is imminent. Then the only question remaining will be if this once-dominant video rental giant can find a way to re-organize, or if the end is nigh.