Not Too Big To Fail: Blockbuster

"The increasingly competitive industry conditions under which we operate has negatively impacted our results of operations and cash flows and may continue to in the future. These factors raise substantial doubt about our ability to continue as a going concern."

Blockbuster Video
Press Release

NEW YORK (AP) - Shares of Blockbuster Inc. sank 30 percent Wednesday after the video rental chain warned that it may have to file for Chapter 11 bankruptcy protection.

Competition from DVD-by-mail company Netflix Inc. and DVD vending machines operated by Coinstar Inc. have eroded the Dallas company's revenue even as it staggers under a heavy debt load.

Blockbuster Inc. said in a regulatory filing late Tuesday that it was suffering "significant liquidity constraints," and could have to file for bankruptcy protection if it was unable to convince creditors to restructure a big chunk of its debt or its business continued to deteriorate.


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