Citi maintains a BUY on Blockbuster (BBI) and believes the strong negativity surrounding BBI right now makes it attractively priced. Citi sees the potential merger with Circuit City (CC) fitting in well with Blockbuster’s overall strategy. They think a BBI-owned CC will be a very different animal as CC stores are integrated into BBI’s overall restructuring plans, which could include beverage and gaming lounges.
They believe there is an opportunity for Blockbuster shares to reach $8/share and following a successful merger, the shares could reach $11. As the market opens today, BBI shares sit at $2.66.
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