Why It's Not A Blockbuster Ipo

The company is in better shape, but prospects may be dim

At another time, an initial public offering of Blockbuster Inc. shares might be a big event. After all, the No. 1 video-rental chain has diligently worked its way through an array of problems and turned itself from a profit drain into a profit spinner for parent Viacom Inc. In the second quarter, Blockbuster's revenue jumped 17%, to $1 billion, while cash flow was firmly in the black at $105 million, compared with a loss of $359 million a year earlier. Furthermore, the 6,658-unit chain boosted its share of the home-video retail market to 31% in the June quarter, from 26% at the end of 1998.

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