Blockbuster To Circuit City: Group Suicide?
"Our proposal offers Circuit City a significant premium to its existing stock price and creates a game-changing retail concept with a sustainable competitive advantage. We believe the combination will result in a compelling consumer proposition that will drive significant revenue and margin enhancements as well as cost synergies."
Mr. Keyes continued, "At Blockbuster, we have successfully deployed a series of strategic initiatives designed to provide our customers with convenient access to media content. These strategic initiatives have already improved our financial results. Driven by strong performance in our domestic same-store revenues, we expect first quarter 2008 adjusted EBITDA to be approximately $110 million versus $23 million for the same period last year.
Wow, he used them all. Ah, "synergy." Baseball managers had a less corporate expression for a common problem with the concept: "You can't make a nickel out of five pennies." But I wouldn't cry too much for Blockbuster, even in the long run. They'll eventually sell all that real estate they own under the video rental stores and find something to buy that makes money.