Blockbuster's (BLOAQ) huge momentum, surges over 70%!

Blockbuster (BLOAQ) jumped over 70% today, even being in the 80% range for a little while, closing at $0.34 a share today. I own the stock in my fund so you can imaging the nice boost it gave my portfolio. It's just a 'fun stock' to own since I usually don't buy penny stocks. Blockbuster is on the rise thanks to the announcement that Dish Network will be streaming their service. Now Netflix (NFLX) has some competition it seems like - and Netflix trades around $127. Of course they are two totally different companies but they operate in the same sector. Fair to set a same price target? Besides that many people left Netflix since their recent price hike. Are people turning to Blockbuster? Whatever the case is, the stock traded around $0.04 cents a share a few months ago, now that's a nice price jump. Unfortunately I got in at $0.20 a share back in the day but I'm glad I held on to it for a nice gain so far. The question always is; should we buy or sell this stock?
Take a look at the chart below:

Notice the huge trading volume? Blockbuster is hot! To me, I think it's still a bargain. However, penny stocks are cheap for a reason. After all Blockbuster did file bankruptcy. With a huge spike like this it's hard to set a target point. I'm still holding tight and see where this is heading. Ultimately its price is determined on how well Blockbuster does with Dish Network (DISH) and is depended on Dish Networks customers. Calculated with everything in mind I see Blockbuster heading towards $1 a share by the end of next month (if not higher), if you own Blockbuster like me; hold on tight!

Fierce bidding expected on Blockbuster (BLOAQ) Monday.

Once a titan in the movie rental industry, Blockbuster is heading to the auction block this Monday. A few potential buyers are Dish Network, Carl Icahn, South Korea's SK Telecom and a few other lesser known companies. The bidding is expected to be very robust as CNBC reported earlier. Regardless, the share price of blockbuster BLOAQ jumped over 31% with this announcement, closing at $0.12 a share.
As you may or may not know, I actually own a few shares of Blockbuster so I'm always a little bit on the edge of my seat why there is any news regarding this company.

I'm curious to see whoever buys Blockbuster, what will happen with its share price. And also, what will the new owner do with the company. My bet is that Dish Network will take this company over for the simple fact that Blockbuster over the years has built up a reputation (branding) in the entertainment industry. Almost everyone in the US knows Blockbuster, whether good or bad, they know it; and likely they associate the company with movies, games and entertainment rentals. Therefore it's likely in my opinion that Dish Network will show more interest since they are pretty much in the same industry.

We'll see.

Is Best Buy following the footsteps of Blockbuster soon?

Is the big electronic retailer Best Buy (BBY) soon to follow the same fate as Blockbuster video? (PINK:BLOAQ), or Circuit City for that matter. It seems to me they have too many 'lookers' and not enough 'buyers'. Take myself for example; yesterday I was in a Bestbuy and I was looking at an electronic gadget that I wanted to get but I knew I could possibly get cheaper on Amazon (AMZN). The issue with Amazon is, that you can't touch the gadget and examine it, at Best Buy you can! Eventually I did a price check and I found it for a lot cheaper on Amazon actually. It surprised me that I saw too many 'shoppers' walking out of Best Buy empty handed, probably doing the same thing as me. People are using Best Buy as a big window shopping warehouse where they can touch, ask questions (although their 'experts' are left to be desired).
I did some research on the internet because I was curious to see how Best Buy was doing as a company with this phenomenon plaguing their stores and it turns out indeed the above observation is true. Friday the Wall Street Journal wrote a similar article.
People 'shop' Best Buy with the intention to buy it somewhere else, ironically doing price scans with their iPhones that Best Buy sells, to find it cheaper elsewhere.
With the (electronic) retail landscape rapidly changing in todays time, more and more big stores go out of business, Borders, Hollywood Video, Circuit City and Blockbuster just to name a few. All because shopping is shifting to internet (think mobile online shopping, plays a huge part in this new landscape).
And it makes sense. If you have the ability to check with a few touches of your finger to do price check on a certain item you just scanned or looked up, and save tens, if not hundreds of dollars, wouldn't you?
So is Best Buy doomed? In my opinion, not yet, at least not anytime soon. They will probably experiment with adapting to smaller stores business models first before they go under like Circuit City. Even in that case this process will take a few years, however at the moment it is not helping their stock price. The crash that occurred in last December is proof Best Buy's outlook for investors is wobbly.

My personal vendetta against Blockbuster video...

These are the times I really love my blog the most, letting out some steam once in awhile. As a shareholder of the company I may have discovered why Blockbuster is doing so poorly, finding a huge flaw in their system. Blockbuster video who refuses to rent me a video game (yes I like to play a video game once in awhile) over the holidays because my credit card information was outdated and did not want to accept my new Visa debit card information although it's under my name and address. Out of principle I didn't want to give out any other credit card information so my wife and I went somewhere else. Guess who did wanted my money... precisely.. redbox, with the same Visa debit card! So I rented Fable III until the day after new years day, great game by the way, but let's get back to the point.

Why would redbox have no problem accepting my payment and Blockbuster declined the same exact form of payment?

Now by Visa debit card I don't mean a Visa prepaid card that you can buy in the supermarkets etc. I understand that, since there is no name or address attached to it. In other words you can pretty much leave $5 on the card, rent a game and never bring it back, no one would know where to look.
But in my case, my debit card had guaranteed money on it, was registered under my name and billing address, it's...well a debit card, not borrowed money from the bank, like a credit card that Blockbuster wanted.
As a shareholder of Blockbuster (BLOAQ: $0.138 -4.17%) I'm not only disappointed but also deeply concerned. For years I've been faithfully renting movies and games, paying a much more heftier price then I should have, after all redbox was right next door, but I kept spending my money loyally to Blockbuster video, since I am stock holder and to me it was the right thing to do.

Well no more.

According to Blockbuster my money is not good enough for them, which concerns me even more, how about all those other transactions that failed because of their same retarded policy?!
Wake up Blockbuster! Instead of closing hundreds of stores nationwide, how about accepting people's money. US dollars! That might help. Redbox got the sale, and guess what, I just discovered Netflix (NFLX: $181.37 +2.96%) has a good deal too,.. I signed up with the same Visa debit card that Blockbuster didn't accept.

I'll still hold on to my stocks though, it's only a minuscule percentage of my portfolio. But I'm tempted to sell it any day and be done with it.

I hope someone from Blockbuster corporate is reading this, they might want to stop missing out on rental money from people like me.
And by the way, just a note, you might want to fix your Blockbuster Express kiosk in my area, all but a few are out of order.

Blockbuster (BLOK.A) stock recap

Well, that went into a downwards spiral. I hate to admit that I was wrong on that call, luckily I don't have too many shares invested in it, and who knows a miracle might happen. It's incredible that Blockbuster is in so much debt. On July 21st I posted an article about Blockbuster (BLOK.A) that was then trading around $0.14 a share. A bargain in my opinion at that time, and for awhile there it touched the $0.20 a share mark. After that it has been going down slowly but surely, with no end in sight other then bankruptcy?

Take a look at the following;

Now trading at $0.07 a share. Any hope left? If this company is going under, I think it's because of mis management, not debt believe it or not. The company's debt is a result of mis management. They adapted pretty much all the things Redbox and Netflix have, just a little too late. No advertising, so not many people know about it. Too bad, maybe it'll be the rise of the little independent video stores again... who knows.

Is Blockbuster stock out of the picture? Don't count it out just yet.

After the downgrade of Blockbuster (formerly BBI: NASDAQ), now BLOKA-PK (pink sheet), (BLOKA) kicked off the exchange since it couldn't maintain a stock price above $1, but the stock still trades OTC at $0.14 a share at this time of writing.
Given the shape Blockbuster is in right now it may be one of the riskiest stocks at the moment. However, I do believe there is some 'hope' for this company given the following analyses of this stock. The heavy competition such as Netflix and Redbox make it seem impossible for this company to survive, but there is something unique about Blockbuster that the competition doesn't have. On top of that, factor in that Blockbuster, unlike it's former rival Hollywood Video, is adapting to it's new market segment. They offer Blu Ray/DVD's through the mail and are starting to set up Blockbuster Express boxes (like Redbox). And if Blockbuster goes under, where would you catch up on some older movies or TV series (on HBO for example)? You simply can not get those at Redbox, so that's one down. When it comes to Netflix, it's all though mail or Netflix capable streaming devices like XBOX 360. Not many people have an XBOX 360 with Netflix on it, since it would require a Gold Membership and the Netflix membership, also you would have to buy a console too. A lot of people still like the idea of browsing though a video store, not to mention the requirement of a credit card. That is the uniqueness I wanted to address.
Factor in the name recognition that Blockbust has built up throughout the years and all the assests Blockbuster still has, it might have a chance to survive for just a little longer.
It depends on management and corporate reshuffle if they want to pull this off. They have a good service and branding. Blockbuster already said it is determent to put their stock back on the NASDAQ in 2011.

As optimistic as I am about Blockbuster at the moment (I'd hate to see these guys go under, I'm an avid renter myself), for the long term I just don't see Blockbuster being around anymore. Eventually technology will make it so readily available to rent movies, download games for a fraction of what Blockbuster charges. But I don't think we are that far ahead just yet.
Within a few years bankruptcy may be imminent, but until that time, there's no reason not to make money off this stock during this period. I see it's value around $0.50 or $1+ pretty soon so $0.14 sounds like a bargain, a risky bargain, but you have to take risk in order to make lots of money.
My recommendation:

STRONG SELL - SELL - HOLD - BUY - STRONG BUY
RISK FACTOR: VERY HIGH
POSSIBLE GAINS: 100% +