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Blockbuster of a Chapter 11 Filing

Thursday Sept 23 2010

Blockbuster  filed for Chapter 11 BK protection. This is another victim of changing technology. As the market moved form VHS to DVD to on line and rental, the market for physical renting shrunk. And so Blockbuster joins Polaroid, Kodak, Nokia, and Iomega (remember zip disks!) as technology changes the landscape. This article explains the planned filing where bondholders become stock holders and debt is written off. 

This is what should have happened to Wells Fargo et al, see previous post on Munger. But Blockbuster was not Too Big To Fail. 

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2 responses to “Blockbuster of a Chapter 11 Filing”

  1. Rico Fernandez Avatar
    Rico Fernandez

    I recently visited a blockbuster and asked the employee what she thought about the bankruptcy and she calmly replied, “oh, companies do that all the time. They are not shutting any stores that generate profit.” Here i was thinking well you better be prepared because i’m sure in the near future their brick and motar establishments will be long gone!

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  2. Dennis Elam Avatar
    Dennis Elam

    A thoughtful observation Rico, cearly BK is now just viewed as a business strategy.

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