Looking at the Blockbuster (BBI) Situation

On the one hand, Blockbuster 9% Notes due 2012 trade at around 26 to yield ~85%. On the other hand, Blockbuster (BBI) has an $80 million market capitalization.

Here are some really pointed observations about the prospects for Blockbuster

Sorry, but Blockbuster's brand carries zero equity on the Internet. That's like making the argument that Sam Goody or Tower Records could steamroll Apple's iTunes just because it once had a large offline presence.

Meanwhile, Blockbuster's cable rivals like Comcast already have far stronger distribution -- via the set-top box already in your living room, and the dedicated video pipe running into your house; Apple and Netflix are arguably leading the technology race; and everyone's on-demand pricing and content is pretty similar right now.
How about Blockbuster's opportunity to sell some of its stores for quick cash to pay down its debt? (As CNBC's Dennis Kneale asks at the end of this segment.) That's also not in the cards. Jim Keyes says Blockbuster leases almost all of its stores on "very short-term leases" -- so the company doesn't have much of a real estate portfolio.

Here's another lengthy post.