Blockbuster says it will combine Class A and B stock following NYSE listing compliance issue
Associated Press
11/21/09 12:20 PM EST
DALLAS — Blockbuster Inc. said late Friday it plans to combine its Class A and Class B common shares after receiving notice its stock didn't comply with the New York Stock Exchange's listing standards.
The struggling movie rental retailer said the combination will improve the company's stock liquidity and eliminate confusion about the differences between the two classes of stock.
On Tuesday, the NYSE told Blockbuster that its shares weren't in compliance with the exchange's listing standard that requires the average closing price of a closing stock to be no less than $1 per share over 30 straight trading days.
Blockbuster's Class A stock closed at 74 cents on Friday and its Class B stock ended trading at 34 cents.
The combination is subject to shareholder approval at the company's annual meeting next year. Blockbuster said it may explore other alternative to its capital structure to smooth out any price issues.
Blockbuster faces stiff competition from Netflix Inc. and Coinstar Inc.'s Redbox. Earlier this month, it said its third-quarter loss more than quintupled as more consumers rented movies by mail or through competitors' vending kiosks instead of driving to its stores.
