The Motley Fool Asks, Is Blockbuster The Next Circuit City?

By that of course they mean “Is a collapse imminent?”.  I maintain my earlier position, no, because frankly, Blockbuster already has a massive library of titles, a huge array of brick-and-mortar outlets, and could EASILY shutter most of them in favor of an entirely online operation via their Blockbuster Online service.

Now this being The Motley Fool, they’ve got all sorts of business-y terms to figure out why Blockbuster just looks totally screwed, blued and tattooed, and I’ll break it down for you.

Their ratio of debt to equity, or stuff they owe to stuff they own, is about four to one.  For every dollar they have, they owe four, basically.

There’s also massive losses in total revenue and revenue per share, both profoundly worrisome to anyone who follows stock prices.  But I maintain that Blockbuster has the necessary position and materiel to at least become Netflix’s nemesis. So don’t look for Blockbuster to bow out yet…but do look for a change in the way they do business. A fairly big one, too.