Investors Buying Into Blockbuster
NEW YORK (
) -- Investors are trusting
Blockbuster
(BBI) - Get Report
, sending the stock soaring after its CEO told CNBC that the company has a "bright future."
"We're in the middle of a dramatic transformation," James Keyes told CNBC on Thursday. "During the course of this transformation, we're moving away from a total reliance on DVDs and now a different form of distribution for both DVDs and digital content. We're building new channels."
The numbers, however, tell a different story. Blockbuster widened its fourth-quarter loss to $434.9 million, or $2.24 a share, as same-store sales tumbled nearly 16%.
On Tuesday, Moody's Investor Services cut Blockbuster's long-term ratings due worry over a potential debt exchange.
Moody's lowered Blockbuster's probability of default rating and its corporate family rating two notches in junk status to "Caa3" from "Caa1."
Still, shares surged 32.8% to close on Thursday at 40 cents.
-- Reported by Jeanine Poggi in New York.
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