Shares of Blockbuster Inc. and its parent company were creamed yesterday after the home video rental giant admitted that it cut its year-end profit forecast by 16 percent because discounted DVDs were crushing its rental sales.
Blockbuster’s stock sank a record 32 percent while parent Viacom’s stock dipped 3 percent on the news yesterday. Blockbuster stock plunged $6.27 to $13.13 yesterday and Viacom’s stock fell $1.31 to $41.68 in trading yesterday.
Wal-Mart and other retailers have flooded the market with cut-rate DVDs for the holidays, stealing market share away from Blockbuster, the world’s largest video rental chain.
Blockbuster came late to the DVD-sales party.