Blockbuster Inc. (BLOBQ: OTC)
Set to become our Newest Member of the ‘Stocks to own Before the Holidays”
Hey Spartans,
We first alerted Blockbuster Inc. (BLOBQ) on September 23, and shortly after our first alert, it shot up over 100 percent. This past week, the stock established support at the .031 area and resistance in the mid .034. The stock has had a healthy pull-back, and a nice churn. Shares are tightening up and with the October 19th Court Date a week away, we have a strong indication it’s getting ready to get explosive….
There is a good indication that this stock is set to bust through the 50DMA and start testing the 200DMA at .25!
Here’s why:
Technically, we think this stock is set to leap over the 50DMA and set a new 200DMA!
1. The RSI at 41.63 just starting to uptrend again
2. The Fast Stochastic is 32.65 and positioned to start another uptrend
3. The MACD is almost in the power zone and has NOT been there since May, when stock prices were at 200DMA prices in the .25 range!
Let’s not forget the BOARD is STACKED with TALENT!!
- Icahn (whose portfolio includes such heavy hitters as Motorola (MOT), Lions Gate Entertainment (LGE), Yahoo (YHOO) and Wendy’s (WEN)) and his board will basically hit the reset button for BLOBQ, taking more than 90 percent of its deft off the table.
- The quartet of hedge funds (Owl Creek Asset Management, Monarch Alternative Capital, Stonehill Institutional Partners and Varde Partners Inc.) has had experience in handling less than secure acquisitions (i.e. Russian ventures, the troubled Texas Rangers franchise and other stressed commercial real estate loans)
- Plus, there’s a possible protection of major dilution – Blockbuster requested a 20-day waiting period prior to any sale or purchase made by investors owning or seeking to own 4.75% or more of the company's preferred or common shares. Blockbuster also wants all holders of 4.75% or more of those classes to identify themselves. Blockbuster asked for this request on an interim basis, so share owners couldn't sell out their stakes awaiting a ruling. Keeping everything safe and steady for us for now.
Here’s the recap:
· On Wednesday, October 6, 2010, 7:12 pm EDT LOS ANGELES (AP) -- Universal Pictures said Wednesday that it will make movies available to Blockbuster Express kiosks on the same day as their release for sale -- but make customers pay a premium above the $1-per-night they can rent them for 28 days later.
· Universal to test higher-priced DVD rentals at Blockbuster kiosks on the same day of release On Wednesday October 6, 2010, 7:12 pm EDT LOS ANGELES (AP)
- On Sept. 23, Blockbuster filed for bankruptcy protection as group of bondholders led by billionaire Carl Icahn and four hedge funds (Owl Creek Asset Management, Monarch Alternative Capital, Stonehill Institutional Partners and Varde Partners Inc.) signed off on a restructuring deal that gives them a controlling stake in the company.
- The company plans to reinvent itself as a leaner competitor with more digital video offerings, including offerings on mobile devices. It said business is continuing as usual with its roughly 3,000
U.S. - Last week, Judge Burton R. Lifland of the U.S. Bankruptcy Court in Manhattan said Blockbuster could tap up to $45 million of the $125 million bankruptcy financing the video-rental company has in place to fund its Chapter 11 restructuring. This allowed the company to tap up to $20 million of the debtor-in-possession loan from its senior noteholders to get through the weekend. He wanted Blockbuster to satisfy minor objections to the financing and to give creditors time to review the request before approving the $45 million interim amount. "I think you've met your burden," Lifland said. He'll decide at an Oct. 19 hearing whether Blockbuster can tap the rest of the loan.
BLOBQ, was our Dead Cat Bounce call by on Sept. 23, at .0206, went to see a high last week of .04 a gain of 94%, we continue to hold this stock and add on the dips. We expect to see a very nice run up in the short term on this stock prior to the October 19th, court date.
Also, management feels that once bankruptcy is behind them, BLOBQ would be better positioned going forward. “(Icahn) recognized the potential of this company,” said Blockbuster board member Edward Bleier. “It's frustrating that it wasn't realized, but it still could be realized.”
“This Dead Cat is distended to ride again Bounce BLOCKBUSTER PLAY”
Please allow yourself to do your due diligence at the company’s website, http://investor.blockbuster.com/phoenix.zhtml?c=99383&p=irol-irhome
Be a part of the story! BLOBQ!
~Spartan~
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