NEW YORK ( TheStreet) -- Billionaire investor Carl Icahn slashed his stake in Blockbuster ( BLOKA.PK) by nearly 80% in the second quarter.

As of the end of June, Icahn held just 680,000 shares of the flailing movie rental retailer, down from 3.3 million in the first quarter.

Icahn began unloading shares of Blockbuster in March when CEO Jim Keyes warned the company might have to file for bankruptcy if it could not rally enough cash to repay its nearly $1 billion in debt.

Icahn also relinquished his seat on the board after serving as director for four years.

Icahn has had a tumultuous history with Blockbuster. In 2005, Icahn waged a successful proxy battle to get himself and two other directors to the board. At the time he accused Blockbuster of overpaying then-CEO John Antioco.

Icahn also wanted to sell the company to a private-equity firm and initially wanted to oust Antioco.

Last week, Blockbuster received yet another extension from creditors to repay $42 million. It now has until Sept. 30 to make the payment. This is the second extension Blockbuster has received this summer.

Blockbuster said it continues to engage in discussion with creditors regarding recapitalization opportunities.

The company also announced a bigger loss in its second quarter of $69 million, or 32 cents a share, compared with a loss of $37 million, or 21 cents, in the year-ago period. This was significantly larger than the loss of 24 cents analysts expected.

Blockbuster's revenue tanked 20% to $788 million from $982 million, also missing forecasts of $840.1 million.

-- Reported by Jeanine Poggi in New York.

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