Chip off the old Block, buster
It was a rocky trading week, but even the wild waves of bullish and bearish splashes weren't enough to keep Blockbuster (NYSE:BBI) from standing out. The video-rental chain, which has a stodgy reputation but has been quickly growing its Total Access mail-delivered rental service, turned heads by picking up digital-downloading pioneer Movielink.
Terms weren't disclosed, though reports set the price at about $20 million. That's chump change for most companies, though it's a surprisingly large outlay for a company like Blockbuster that has quaking creditors.
Still, it needed to be done. I remember poking fun at Blockbuster a year ago, when former CEO John Antioco argued that Blockbuster needed a hardware assist to make a difference in online delivery.
"Conventional wisdom says consumers don't want another set-top box," he said during the Reuters Media Summit back in November. "I'm not sure I'm in that camp."
Well, we're now several months removed from that statement -- and his ouster -- and it's OK to say that he was wrong. Even the seemingly infallible Apple (NASDAQ:AAPL) has had a hard time moving its Apple TV contraptions.
Movielink doesn't introduce a new set-top box into the mix. It's mostly a PC service, but it can also get programming into your television if you have a broadband-enabled Xbox 360 or an AT&T Homezone box.
That's the key. Like the deal that Amazon.com (NASDAQ:AMZN) struck with TiVo (NASDAQ:TIVO) earlier this year to deliver Unbox video rentals and purchases directly into your DVR, Blockbuster is doing the right thing by going with an advanced digital-delivery strategy that doesn't involve wiring another clunky gadget in your living room.
Yes, even stodgy retail chains want to matter in cyberspace.
The sky is falling, sort of
The ups and downs are frustrating to investors -- specifically the downs -- but do keep your head up. It's still business as usual in many areas. Companies are still buying other companies. Chinese IPOs such as real estate agency E-House (NYSE:EJ) are still going public. There's even an adult-entertainment company in New Frontier (NASDAQ:NOOF) yielding 8.3% after a recent share-price meltdown.
In other words, the market is doing what it always does. It prices, dices, and slices companies every single trading day. Keep an eye on the fundamentals of the stocks you own. Keep an eye on the fundamentals of the stocks you want to own. Volatility can be your friend, especially if your goal is to get the best pricing possible on equities for your portfolio.
Until next week, I remain,
Rick Munarriz
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Longtime Fool contributor Rick Munarriz recommends windshield wiper fluid when trying to look back. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.
