Redbox parent Cointsar’s stock has been in the doldrums ever since the company announced that it would be unable to meet earnings expectations for the fourth quarter of 2010. Shareholders are worried about both Redbox’s near- and long-term investment value.
Finanical site SeekingAlpha, for one, believes that Coinstar stock is at a good price right now and has likely hit bottom. SeekingAlpha believes that Coinstar’s growth of 9.5% over the past five years should be sustainable for the next five.
SeekingAlpha is not bullish on Coinstar stock as a long-term (five-plus years) investment, however, citing concern about Redbox’s ability to stay competitive in a marketplace that is quickly shifting away from physical media.
Commenters on the story offer differing opinions, with some believing that Redbox’s business model has more life in it than many believe. Speculation is also running that Coinstar could be picked up by a rival such as Netflix or Amazon or maybe even a Hollywood studio.The general consensus, however, remains that Redbox needs to implement a new side of its business that does not depend on physical discs such as DVDs and Blu-rays.
What do you think, Insiders? What are Redbox’s short- and long-term prospects, and will a streaming or other non-traditional model keep the company relevant for many years to come?