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I agree its a risky move but blockbuster has been having 2 and 3 cent swings every day or every other day up until the past few days and there's plenty of volume so you knwo you can sell it. If you picked up some bloka around 0.06 and sold at 0.08 thats a 33% gain.
No, don't do it. You will lose money for sure. I can bet both my antlers on it and win another pair even.
I would say your idea is speculative at best with very little shot of succeeding. Hollywood Video is on its way to bankruptcy and nobody's bought them out yet. My bet is, Netflix or somebody will snatch up their inventory for pennies on the dollar.
I know Blockbuster has HUGE financial problems and good chance on it's way to BK but this seems somewhat similar to what happenned to Sirius Radio when it was down to 0.05 or 0.06 and it wound up shooting up to around $1.50.
Wondering if I can pick up maybe $1,000 worth of Blockbuster stock at around 0.05 if it would be a good risk. I know a good chance it's going BK but thinking maybe amazon, microsoft, google, netflix, someone might buy them.
What are your thoughts?
The business model is obsolete and no longer competitive to places like Netfix and renting DVD via vending machines. Blockbuster is in a death spiral. I wouldn't be surprised in the 12 to 18 if they filed for bankruptcy. Video stores will be remembered 10 years from now like drive-in movies were when I was a kid.
Here's the deal with BLOKA...if they go bankrupt equity holders are likely to get wiped out...if they get financing/renegotiate terms and equity holders don't get wiped out...you will make several times your investment.
Their business model, future of their stores, etc. is all nearly irrelevant except for how it enables them to get financing and decrease the debt on their balance sheet.
The business is still real and they still produce sales and have some kind of marginally innovative pipeline. However, if they can't renegotiate terms of the debt or find some kind of emergency financing, how good (or bad) their business is won't really matter.
OP you don't seem to have a strategy for the trade. In your OP you said you were buying it because it may follow what Sirus did and shoot up or be bought by another company, but then you suggest instead trading on the volatility because if it goes up from .06 to .08 you'll get 33%.
You will lose money because you're not even sure why you are buying, and have no exit strategy. Let me ask you a question: If the shares get to 0.08 will you actually sell, or will you just hang on because they could go higher?
I suggest a trip to the races or casino; at least you can get drunk while you lose your money.
As for Blockbuster, the business model is dead, I can't think of the last time I walked into a video store, and the numbers don't lie.
OP you don't seem to have a strategy for the trade. In your OP you said you were buying it because it may follow what Sirus did and shoot up or be bought by another company, but then you suggest instead trading on the volatility because if it goes up from .06 to .08 you'll get 33%.
You will lose money because you're not even sure why you are buying, and have no exit strategy. Let me ask you a question: If the shares get to 0.08 will you actually sell, or will you just hang on because they could go higher?
I suggest a trip to the races or casino; at least you can get drunk while you lose your money.
As for Blockbuster, the business model is dead, I can't think of the last time I walked into a video store, and the numbers don't lie.
I actually have a bad habit of selling too quickly rather than holding onto things too long.
I actually did have an exit strategy. I was planning on buying low and selling on one of the spikes, sure a spike is only 2-3 cents but when you pick up the stock for 0.29 thtas a huge swing. I bought in the toher day at 2.9 and just sold today at 5. I left a few hundred shares that were pure profit in the stock and took my gains.
If something does happen I have a little bit of BLOKB still if not its all profit I lost plus I already took some profit.
Here's the deal with BLOKA...if they go bankrupt equity holders are likely to get wiped out...if they get financing/renegotiate terms and equity holders don't get wiped out...you will make several times your investment.
Their business model, future of their stores, etc. is all nearly irrelevant except for how it enables them to get financing and decrease the debt on their balance sheet.
The business is still real and they still produce sales and have some kind of marginally innovative pipeline. However, if they can't renegotiate terms of the debt or find some kind of emergency financing, how good (or bad) their business is won't really matter.
Efven Blockbuster is converting to the video machine as I see them going into sotres to compete. I would say that netflix may also lose businesss to this new model that is spreading.
Netflix has been moving to the video streaming, The video machines have a very limited collection of the 40/50? hottest movies. Netflix thru streaming has thousands(tens?), and just about every movie/TV show ever made on dvd.
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