I know, another Blockbuster post?
But an article in the Wall Street Journal (who ClusterStock got this story from) says Blockbuster’s proposed take over of Circuit City was a big fat phony. Here’s why Keyes wanted to go through with it:
Blockbuster is now a stronger contender in electronics retailing, Mr. Keyes argued, because manufacturers started courting the company after the bid.
“We were really not on the radar screen of any major consumer-electronics manufacturers previously,” Mr. Keyes told Dow Jones Newswires. “They did not see Blockbuster as a potential retailer of these devices. With the announcement of the Circuit City transaction publicly, it caught the attention of all the [consumer-electronics] providers.”
Of course, that result must only make investors wonder why Blockbuster offered a hefty 58% premium for Circuit City back in April, with no knowledge of its target’s finances, and pursued its bid so aggressively that it enlisted corporate activist Carl Icahn.
Wow. So in order to get the free publicity, they organized a takeover bid with no knowledge of how much it’d really cost. While that’s more creative than DVD rental kiosks in DVD rental stores, it’s a bad tactic.
Fuel the rumors a little, that’s fine. Go find out how much the sucker would cost, sure. But don’t claim you’re doing an outright bid to change your entire business to court some device manufacturers. Would you believe that some devices could use your content IF YOU BUILT OR EVEN PROPOSED A SERVICE THAT THEY COULD USE!!!!?!?!?!?
Blockbuster’s just using the Catch-22 error of “I don’t have a device to play my stuff on, so I won’t build it.”/”They don’t have anything to play, so I won’t build a device.” as a way to royally screw with investor’s opinions and game stock prices.
Shouldn’t their be a legal precident that covers this kind of “speculative takeover bidding for the sake of making us rich?” All my lawyers, holler at your boy in the comments below.
