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Blockbuster Bankruptcy

Written By Brian Hicks

Posted March 20, 2010

Welcome to the Wealth Daily Weekend Edition — our insights from the week in investing and links to our most-read Wealth Daily and sister publication articles.

Blockbuster’s in a heck of a bind… warning of potential bankruptcy.

But while its warning may be scary for investors now, restructuring may be the company’s last ditch effort to survive. The company declared in an SEC filing that it might be forced to file for protection if cash flows don’t improve and if it’s unable to restructure $1 billion in debt.

"These factors raise substantial doubt about our ability to continue as a going concern," Blockbuster said.

And it’s not as if Blockbuster can really survive on its own… Just last month, the company posted a loss of $434.9 million — or $2.24 a share — as same store sales plunged about 16%. At least they’re trying to turn things around, though, closing under-performing stores and using kiosks to compete with the likes of Netflix (NFLX).

And there’s still plenty of time to trade the potential bankruptcy filing. In fact, we name one trade in this report.

Here were some other opportunities we found this week:

  • The foreclosure story continues to heat up, sending one of Options Trading Pit‘s stocks roaring north by more than 20% in just days. Just as we’ve been warning for months, foreclosures will be a crippling problem for the United States. Even the Washington Post agrees. Unfortunately, three long years and millions of foreclosed homes later, there’s still a wave of foreclosures headed our way — just as we’ve been warning readers since the early days of 2007. We’re nowhere near the end of a crisis that could cost us $1.5 trillion.

  • We also believe the GARP downgrade of Cree (CREE) was too early. We’re not talking about an overvalued stock here… What we have is a stock in a growth industry that is expected to grow at an increasing rate over the next five years. And if demand continues to grow beyond 2012 (as projected), how can the stock be overvalued? It can’t be. CREE is in an industry that’s just beginning to skyrocket. This is a stock that Pure Asset Trader has been recommending since $15. Now at $70, it’s still a buy because people know — as well as the government — that LEDs are the future.

Stay Ahead of the Curve,

Ian L. Cooper
Wealth Daily

P.S. In case you missed any of the week’s top-read articles from Wealth Daily and our sister publications, you can catch up on them now:

A Ballsy Solution to the Social Security Mess: Time to Sell U.S. Citizenship
Wealth Daily Editor Christian DeHaemer offers up a solution to the Social Security debt mess.

Unique Trading Strategies for Today’s Markets: We’ve Got Plenty of Ways to Make Money
Editor Nick Hodge takes a look at Wealth Daily‘s experts, the techniques they use to pick stocks, and how their readers reap the benefits.

Foreclosure of a Dream: Three Simple Ways to Profit, as Foreclosures Mount
The subprime crisis — the one that triggered the banking meltdown… the one that body slammed the Dow from 14,164 to 6,547… the one that already tossed millions of Americans on the street — was "only" a $1 trillion problem. Fortunately, that mess is almost behind us. That’s the good news. Wealth Daily brings you the rest of the story.

The 2010 Housing Market "Shadow Inventory": A Rising Tide of Foreclosures
Editor Steve Christ examines the 2010 housing market and explains why it’s make-or-break time for real estate.

The Green ATF
: Historic Policy Coup Creates a $30 Billion Market Overnight

Wealth Daily reports on the company that just inked a contract worth 264% the company’s entire market capitalization. That’s a single project worth more than two and half times the company’s total current value. It’s a major undertaking, projected to generate enough revenue to boost the stock price as much as 171% in the short term.

Chinese Clean Energy Stocks: The Next China-Fueled Cleantech Cash Machine
Green Chip Editor Nick Hodge takes a look at the history of cleantech development in China, and highlights what he thinks will be the next lucrative play.

An Investment in Smart Grid Software: The Unsung Hero of the Energy Revolution
Energy and Capital Editor Chris Nelder takes a fresh look at how software is enabling the energy revolution, by streamlining rooftop solar design, improving home energy efficiency, and putting the "smart" in smart grid…

Investing in Molybdenum (Moly) Stocks: 9 Moly Stocks to Make Your Portfolio Pop
Wealth Daily Editor Luke Burgess explores the world of investing in molybdenum and details nine moly stocks to make your portfolio pop.

American Superconductor Stock: Avoiding a Bout of Bad Information
Energy & Capital‘s Nick Hodge discusses American Superconductor and dispels some recent bad information floating around about the company.

The Death of Death: Changing the Future of Biotech
An American bio-pharma firm owns the breakthrough that could soon render millions of annual deaths from disease a thing of the past. WD reveals to readers the name of the company creating the vaccine that could turn your $5,000 investment into an easy $500K return.