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Ricklogic

"The amendment raises the value of sales, transfers or disposals of assets that Blockbuster may transact without lender approval to $250 million..."

Icahn continues to solidfy the company's finances. Add in the large amount of free cash flow they generate and Blockbuster will continue to aggesively push their competitive advantage through the end of the year and beyond.

I'm not saying that Blockbuster will win or shut Netflix down. Just that it will be a bloody fight from now on. At least until download and VOD replaces both of them.

leonardodicrapio

Rick,

Large amount of free cash flow they are "generating?" I would hardly describe selling off your last remaining assets as generating large amount of free cash flow.

Blockbuster still have some assets to sell (obviously something that is over $100 million), but their assets are about $1 billion (roughly) and their debt is roughly $1 billion. About 5 years ago, Blockbuster had assets over $5 billion.

It was quite a war chest that Blockbuster had built up. But it looks to me more like Blockbuster is keeping the house but putting up the good china on EBay.

Ricklogic

'Free cash flow' is an operational term, separate from investing activities that produce cash such as the sale of assets.

Whatever they get from selling assets goes to pay debt.

What they get from operations can be used for all types of purposes.

leonardodicrapio

How about resolutions (in the amount of about $50 million) to multi-year tax audits? Would Blockbuster have had positive free cash flow without this one large line item? Blockbuster operations was not profitable in 2006, although it was a lot closer to breaking even then in years past. Still, their operations lost approximately $10 to $20 million dollars, hardly something to be rewarded by millions of dollars in bonuses to Antioco and the other executives of the company.

Edward R Murrow

This is about as exciting as when your neighbor does a refi of their home mortgate to send one of their kids to college. Wake me up when BBI finishes with their refi.

leonardodicrapio

Blockbuster must be like a lot of American. They refinanced the house and paid off their credit cards, now they have charged themselves back up to their limit.

By the way, I made a pretty good call about the Blockbuster earnings yesterday (I said their "earnings" would be a $50 million loss or about -$0.25 per share).

http://www.hackingnetflix.com/2007/04/blockbuster_q1_.html#comments

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