Wednesday, April 23, 2008

A Blockhead Move by Blockbuster?

I was reminded of this cartoon about Belton Iron Works and Fried Chicken when reading about the proposed acquisition of Circuit City by Blockbuster. While their businesses may be more related than iron and fried chicken, it's far from clear how this acquisition makes sense. Here's an article from Reuters and one from Cnet's news.com also questioning the logic of the deal.

The market seems to agree. Blockbuster's shares dropped around 14% the afternoon of the announcement.

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