Rich Fiscus
19 Nov 2007 15:18
Carl Icahn, the major Blockbuster Video investor who led the charge to get rid of former CEO John Antioco and replace him with current head James Keyes, increased his ownership in the top U.S. brick and mortar video rental chain by 1.7 million shares. He paid $6.2 million for the shares. Even before the purchase Icahn was Blockbuster's largest single shareholder.
Over the last several years Blockbuster has struggled to establish a new identity to allow them to compete with online rental service Netflix. Antioco was responsible for returning Blockbuster to profitibility while apparently competing with Netflix for their customer base for the first time ever. However Netflix has made repeated moves to stay competitive, and Keyes was brought in to refocus Blockbuster on its core business of brick and mortar stores. Despite being number 2 in online rentals, they're dominance in traditional rentals is as strong as ever.
Perhaps Icahn's increased interest in the company is related to Keyes' recent statements regarding future plans. According to Keyes there will be kiosks of some kind in the near future, which could eventually include capabilities for downloading content to mobile devices. Blockbuster also purchased failing online movie service Movielink this year, which they're expected to retool to work with their services at some point in the not to distant future.
Source: Video Business