Blockbuster (BBI) Seeing what Sticks to the Wall

29 Apr 7:51am
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Ever hear the saying "throw some $#%t against the wall and see what sticks"? Thus seems to be Blockbuster's (BBI) current business plan.

After being late to the video by mail model, late to the box top set model, talking about turning their obsolete locations into Apple Stores (AAPL) like locations, and attempting a doomed from the start takeover of Circuit City (CC), Blockbuster is trying something else.

Now Blockbuster is in talks about taking a stake in the new premium TV channel to be launched by Viacom with Lions Gate Entertainment (LGF) and Metro-Goldwyn-Mayer.

Ok. Haven't we all come to the conclusion blockbuster doesn't have the financial ability to complete the proposed Circuit city deal? How do they intend on doing this also? Have you ever seen a company run in so many seemingly disconnected directions at once?

This smacks of desperation. Blockbuster could survive and even prosper and compete with Netflix (NFLX) if they would only acknowledge what everyone but them seemingly understands, they need to close their stores. Should that happen, the cash save could possibly finance one or some of the shotgun like business moves they are contemplating. They cannot, however, keep them and do the others..

I guess the only thing left to do for them is to talk about a merger with Sprint (S)?

Disclosure ("none" means no position):None

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ToddSullivan

A Massachusetts based value investor, I look for companies whose current valuation is at a discount to their true value. When I purchase a stock, my typical holding period is several years. I consider buying a stock purchasing a piece of a business. I am confident once I make a decision to buy that eventually the market as a whole will recognize the true value of the business and value it accordingly. It may take 1 month, 6 months or a year, but if I buy it at enough of a discount to its true value my results will be (and have been) superior to the market as a whole. Of all the disparate investing disciplines, value investing has stood the test of time. The great investors of have all been value investors. Warren Buffett, Ben Graham, Bill Ruane (Sequoia Fund), Bill Miller and Wally Weitz, all have consistently outperformed the market for decades by using various forms of value investing. Currently I am a contributing writer to Seeking Alpha, Vinvesting.com, The Stock Masters and Value Investing News. Posts have been reprinted in The Wall St. Journal, Yahoo Finance, Google Alerts, Google Finance, TheStreet.com. 24/7 Wall St. and Topix.net.