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A somewhat red-faced Blockbuster revealed today that it is not in compliance with a New York Stock Exchange rule and has 45 days to submit a plan that will return it to compliance within 18 months. The rule in question requires that companies listed on the exchange have a global market capitalization (market cap) of $75 million over a 30-day trading period.

BB’s shares, which hit a peak of $29 in the company’s heyday in 2002, closed at 28 cents today. Company CEO Jim Keyes, who has gotten very well-versed at spinning bad news lately, said the following about Blockbuster’s plans to return to NYSE compliance:

“We intend to promptly submit a plan to the NYSE, which will outline the proactive steps we plan to take to remedy the company’s noncompliance by September of 2011,”

The company will ask investors to approve the execution of a reverse stock split at its upcoming annual shareholder meeting, which would artificially inflate the value of BB stock by combining Class A and B stock into a single, smaller class.

Any Blockbuster stockholders out there, Insiders? Whether you own BB’s penny stocks or not, tell us what you think about this latest hit to the company’s reputation. Will Blockbuster be around in September of 2011 to make good on Keyes’ “proactive steps”?

(via Reuters)

4 Responses to “Blockbuster Runs Afoul of NYSE Compliance Rules”

  1. Visitor [Join Now]
    John Small [visitor]

    BBI will be around but it will be a much smaller company. The still have lots of very profitable stores.

    • Visitor [Join Now]
      Tee [visitor]

      John, not so sure. If they can crawl out from the HUGE debt burden they have and make several key moves they may have a chance, if not their day’s are numbered. Given the current management and lack of understanding necessary to survive and thrive in this rental environment, I have little faith that they can orchestrate all the right moves given that time is not their friend.

    • Visitor [Join Now]
      Firstlawofnature [visitor]

      I think the tipping point has been reached and even the very profitable stores will start to bleed soon. The markets where Redbox and Netflix are the most penetrated (generally where the services have been offered the longest) are even more hostile to stores. As other markets approach the level of penetration of the older Redbox and Netflix markets we’ll see even the profitable Blockbuster stores get pinched. And since they focused on 10 different things at once, rest assured Blockbuster will excel at zero of them.

  2. Visitor [Join Now]
    tinybrat [visitor]

    I think what people need to look at is how the actual stockholders and board of directors feel about their own company. Year 2002, BBI stock was $29/share. Today, stock is 25 cents a share. Today,Carl Icahn sells almost all of his 16% stake in blockbuster. Many of the directors have resigned with more resignations coming this month. BB is all but gone.