Third-Point Capital Management has a new position in Blockbuster.
In the last quarter Dan Loeb’s hedge fund bought shares of Blockbuster (BBI), which is currently trading for 79 cents.
BBI has recently been trading between 70 cents and $1.40. Third Point picked up 4 million class A and B shares for $3.8 million and they are not the only investor betting Blockbuster can do better.
Carl Icahn’s fund has held onto their 15 million shares for over a year and a half, though BBI stock has dropped a whopping 91% in the past five years. Auditors worried that Blockbuster might be forced to go bankrupt last April when the company was trading at 22 cents, but the home entertainment company rallied. In October they raised $675 million from the sale of new bonds, twice the amount they had anticipated.
Last week on November 12th Blockbuster released lower than expected earnings of $116.8 million (60 cents per share). Shares dropped only a few cents in the days following, from 83 cents to 78 cents.