Blockbuster Stock Gets Dose of Confidence 

Former competitor buys stock

(Image from Flickr.com)

According to the Dayton Business Journal , Blockbuster Inc.’s stock price rose 13.83 percent Monday morning to 74 cents per share. The increase came after the company received a vote of confidence from a former competitor who purchased additional stock in the company.

A Securities and Exchange Commission filing says Mark Wattles, president of Wattles Capital Management LLC and the founder of Hollywood Entertainment Corp., purchased Blockbuster shares this week, bringing his ownership to 5.7 percent of all outstanding shares of common stock.

and based on his experience

Wattles has experience in the industry. He founded Hollywood Entertainment Corp., a movie and video game rental company that became the second largest movie rental and retail chain after Blockbuster.

believes there’s no reason to file bankruptcy

In the filing Wattles expressed confidence in Blockbuster (NYSE: BBI), saying he does not believe Blockbuster has a motive to file a Chapter 11 bankruptcy reorganization. His confidence is backed by Blockbuster’s proactive cost-cutting through store closings and subleases.

The filing states: “Mr. Wattles does not believe that the issuer has a motive to reorganize under Chapter 11. In addition, regardless of likelihood of obtaining a ‘going concern’ qualification from its auditors, Mr. Wattles believes the issuer will be successful in refinancing its revolving bank line of credit, or if it cannot, that it will be able to use cash flow from operations to meet its August repayment obligations.”