updated 01:45 pm EDT, Mon July 5, 2010
Blockbuster can't hold share price under threat
Blockbuster has been dealt a major blow as it has been told it will likely be delisted from the New York Stock Exchange. The company had tried to keep its share price over the minimum $1 by combining its Class A and B shares through a reverse stock split but wasn't able to get enough votes. It had been warned of the problem in November but lost a vote at the meeting that was blamed on "low vote turnout."
The forced exit from the NYSE parallels the rapid fall from prominence for Blockbuster in the past several months. It plans to close up to 960 stores this year as Internet-based opponents have robbed it of much of its core business.
Some of the plunge can be attributed to services like Netflix, which still handle physical rentals but use Internet ordering to avoid the stock limitations of retail stores. However, Blockbuster has also been hindered by direct Internet download services like iTunes; Apple is often considered the largest US provider of pay-per-movie Internet rentals and purchases, and as a consequence has blunted attempts by Blockbuster to move into digital. Netflix also offers Internet streaming and currently has a larger reach than Blockbuster, both on devices like the iPad as well as TVs and set-top boxes.