Blockbuster Shares Suspended on NYSE

Need more proof that times are tough? Well, according to reports coming out this morning, rental chain Blockbuster is teetering on the edge of bankruptcy. The company, long synonymous with movie rental, has been hit hard lately with competition from online services like Netflix and GameFly. In the past five years, Blockbuster’s stock has plummeted from around $17 per share to just barely over a buck a share. Then yesterday, as word started to eke out that the company might be looking into filing bankruptcy proceedings, the shares tanked 76 percent, down to $0.22 per share, before the New York Stock Exchange suspended trading in the company.

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Tecmo and Koei Agree to Merger Deal

Could Dynasty Warriors: Dead or Alive be looming around the corner? Probably not, but the remote possibility did actually get bumped up a little bit today, as shareholders in both Koei and Tecmo agreed to move forward with a proposed merger deal. It wasn’t a unanimous decision though, as Tecmo’s second largest shareholder, Effissimo Capital Management, opposed to the merger and stated that it may sell off its 18 percent stake in Tecmo as a result.

Barring any unusual surprises, the deal will have Tecmo investors getting 9/10ths of a share in the merged entity for every stock they currently hold, while stockholders on the Koei end will exchange their shares in a straight up one for one trade.

Oddly enough, the marriage between Tecmo and Koei could actually do a lot for both companies. Koei has had a lot of success with its Dynasty Warriors franchise, while Tecmo’s Ninja Gaiden and Dead or Alive series have always been fan favorites. With the potential for crossover alone, adding Ryu, Kasumi, and Ayane to a new Dynasty Warriors game for example, the combined strength could make a hefty impact on the Japanese game market. Plus, thanks to Tecmo’s success in the Western market, it’s possible that the merger could give Koei a bit of wider appeal to the audience outside of Japan.

Netflix Posts Huge Q4 Profit Spike

So, just how big of a different can the Xbox 360 make? You’ve got to wonder based on the news yesterday that online DVD service Netflix has seen a jump in its fourth quarter profits of roughly 45 percent. This coincides nicely with Microsoft’s release of the New Xbox Experience, which incorporated the Netflix service, allowing Xbox LIVE Gold members with a subscription to the Netflix service to stream movies and TV shows to their televisions straight from the 360.

According to the numbers released yesterday, Netflix’s subscriber base grew by 27 percent last year to about 9.4 million subscriber total. Nearly three-quarters of a million of those subscriptions have been added since September, and the company expects to break the 10 million subscriber mark before the end of the first quarter of this year.

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Ubi Stocks Take a Nosedive

It seems like only yesterday that we were reporting on Ubisoft’s strong Q3 financials. Oh wait, it WAS yesterday. Apparently someone at the UK stock market failed to get the memo, as the video game publisher’s stock price took a nosedive, dropping 23 1/2 percent in trading this morning.

It seems strange that Ubi’s stock would take such a heavy hit after reporting third quarter sales of more than $650 million, however it looks like investors are getting generally skittish when it comes to video game publishers. The Ubi stock drop came after the company announced it would be lowering its expected earnings slightly for the fourth financial quarter, due mainly to the current economic state.

Meanwhile Microsoft, which announced cuts of 5,000 jobs over the next 18 months, saw its share price drop 12 percent in trading yesterday. Sony, hot on the heels of its own financial woes saw its share price drop by more than 6 1/2 percent in the Tokyo market. And with news of multiple layoffs and restructuring over at Electronic Arts, it seems like only a matter of time before EA’s stock takes a similar hit.

Warner Builds Stake in Eidos

Back in October, we reported that Warner Bros., looking to increase its stake in video game publisher Eidos, was cleared by Eidos investors to pick up more stoke in the ailing company. Not long after, the rumor mill started grinding hard with talks of different companies eying the home of Tomb Raider for a potential buyout. Today, word coming out of Warner is that it decided to exercise that stock purchase agreement to purchase another 10 million shares in Eidos, bringing its total stake to 52.5 million shares, about 20 percent of the total company.

Back when it first invested in Eidos (then SCi Entertainment), Warner was originally subject to a contract restricting the number of shares it could own until early 2009. SCi then loosened the stock restrictions somewhat, opening things up further for Warner, so long as the total stake in the company remained under 30 percent through 2008.

Warner’s increased stake in Eidos, at least on paper, looks to be a win/win situation for the media giant. With rumors of at least three other publishers vying for control of Eidos, Warner is in prime position to either take control of Eidos at a fraction of the cost as the other suitors, sell off its stake in the company for a profit, or simply sit back and rake in the dividends regardless of where Eidos eventually ends up.

Midway Staring Down $240 Million in Debt

2008 has not been a very good to Midway, and things only seem to be getting worse as the year is wrapping up. Last week, it was reported that Sumner Redstone had unloaded his controlling stake in the company for the fire sale price of $100,000. Now comes word that Redstone’s stock dump may have triggered events which could force Midway to face off against the immediate repayment of $240 million in debt.

According to a Chicago Tribune article posted on Friday, Midway had hired financial advisory firm Lazard Ltd. to evaluate “strategic and financial alternatives” to help the company deal with its ever-growing debt. Also, the company was apparently unaware of Redstone’s plan to unload his 87 percent stake to private investor Mark Thomas for about $100,000 plus $70 million in debt.

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Activision Blizzard Changes Stock Symbol

If you were getting accustomed to Activision Blizzard’s NASDAQ stock exchange symbol of ATVID then its time to retrain your brain - I hear Nintendo has a product for that. The mega publisher will resume trading under the stock symbol ATVI beginning today. The letter “D” had been temporarily added to Activision Blizzard’s NASDAQ trading symbol following the close of the merger of Activision and Vivendi Games on July 9, 2008.

Just make a note of it so, you know you, don’t look like an idiot with your business savvy friends..