Icahn: Blockbuster 'Worst Investment' I Ever Made
This is an immense statement for a man who has spent 30-plus years as an investing tycoon.
Icahn made the statement in an article he wrote for April's Harvard Business Review. The piece was in response to a story previously written by former Blockbuster CEO John Antioco, who detailed his difficulties in working with Icahn.
Icahn wrote: "Blockbuster turned out to be the worst investment I ever made. It failed because of too much debt and changes in the industry. It had too many stores, Netflix (NFLX) created a better business model, and then Redbox kiosks and the whole digital phenomenon eliminated the need for consumers to go to a separate DVD store."Icahn's comments raise questions regarding the billionaire's future involvement with the floundering movie rental chain. Earlier in the month, Icahn was granted permission by a judge in bankruptcy court to make a bid on Blockbuster if he so chose. This came after one junior creditor said he shouldn't be allowed to bid in an auction. Icahn has had a long (and sometimes sordid) history with Blockbuster. In 2004, he gobbled up shares of the company, intent on seeing a merger between now bankrupt Hollywood Video and Blockbuster -- a deal that never materialized. Then in May 2005, Icahn waged a successful proxy fight to add himself and two other members to Blockbuster's board of directors. Icahn accused Blockbuster of overpaying then-CEO Antioco. The battle between the two eventually drove out Antioco. In January 2010, Icahn stepped down from the board of directors, citing Institutional Shareholder Services guidelines regarding how many directorships he can hold. Prior to the bankruptcy filing in September, Icahn bought about a third of senior bonds, according to reports. --Written by Jeanine Poggi in New York.
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