Some years ago when I was on the sellside, I would occasionally got dragged into these banking meetings to discuss funding new and existing companies. I had a good understanding of Tech, and apparently lent gravitas (ha!). These sorts of meeting request went up after the media exposure increased.
I got into a bit of hot water at some of these for saying what I thought. I recall one of these meetings was with a group that had made a large previous investment into Blockbuster (I don’t recall if they bought via public or private equity).
Curious, I asked what the value was: This wasn’t a turnaround play, it was more of a sell off the whale oil and meat to recoup what was left from the carcass play.
“You describe this as if its a dying industry.”
Well, duh. “Isn’t it? Isn’t Netflix and internet delivery going to make driving to a store and renting plastic discs ancient history? You could no more turnaround a steam engine company once gasoline engines came around.”
The bankers were not happy with me, but I certainly saved them (or their investors) money, as Blockbuster just filed for Chapter 11, wiping out shareholders, and reducing their debt load 90% from nearly a billion dollars to about $100 million or so.
Somewhere between then and now, we rec’d shorting BBI, but it was a tough borrow, and a regular squeeze play.
CrowdQuery: Who is the next major company, business, or sector to go belly up?
Let’s consider 3 categories:
1) who goes down in 2010 or ’11
2) who is in danger between now and 2015.
3) Whose long term prospects are clouding up?
What say ye?
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video after the jump
Historic ‘Blockbuster’ Store Offers Glimpse Of How Movies Were Rented In The Past
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