Blockbuster Stock Soars on Movie Gallery Demise

Blockbuster is advancing following Movie Gallery's formal announcement that it will close all of its stores.
Author:
Publish date:

NEW YORK (

TheStreet

) -- Blockbuster is surging in following

Movie Gallery's

official announcement that it will shutter all of its stores and liquidate operations.

While the

Wall Street Journal

broke this news last month, Movie Gallery's formal announcement is still sending shares of Blockbuster up 10.4% to 43 cents in Tuesday afternoon trading.

The elimination of Movie Gallery could provide Blockbuster with a much-needed boost. Blockbuster, which has also said it could be on the cusp of a bankruptcy filing itself, has been struggling to remain relevant as the competition heightens from

Netflix

(NFLX) - Get Report

and DVD kiosks like

Coinstar's

(CSTR) - Get Report

Redbox.

Blockbuster said earlier in the year that it may be forced to file for bankruptcy if it cannot shore up enough cash to repay its debt. Blockbuster currently carries roughly $1 billion in debt.

-- Reported by Jeanine Poggi in New York.

Follow TheStreet.com on

Twitter

and become a fan on

Facebook.