Netflix (NFLX) and the Streaming Wars Message Board

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Technology Stocks : Netflix (NFLX) and the Streaming Wars

NFLX 108.18

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10:13 AM EST

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From: professor	4/12/2005 9:44:00 AM
	of 2280

Blockbuster B Shares Matter During Icahn Battle This may be an interesting low risk trade to set up while the Carl Icahn seeks control. The Harris Nesbitt analyst seems to think so too. 12-Apr-05 Harris Nesbitt brokerage firm Flash: Blockbuster B Shares Matter -- Now 4/12/2005 6:55:18 AM "The split off from Viacom (OUTPERFORM) created two classes of Blockbuster shares, the A shares (BBI-roughly 115 million outstanding) shares with one vote and the B shares (BBI.B-roughly 70 million outstanding) with two votes. Since the October split off, the B shares have generally traded between a 4% and 6% discount from the A shares, a valuation gap that may shrink given the proxy battle that has just begun over an alternative slate of directors proffered by 9.7%-share-owner ,Carl Icahn. While Blockbuster does not have the flexibility to exchange A shares for B shares until October 2006, lest the tax free split-off from viacom be nullified, there are likely to be two shareholder meetings and votes to elect directors in that time frame. The B share valuation gap is likely to shrink, given these circumstances. There is no way to handicap the outcome of the proxy battle at this time. Our view: * The valuation gap between BBI's A and B shares is likely to shrink (from its current 3.6%) given the voting benefit of the share under the currently escalating proxy battle. * Management and insiders do not control more than 12% of the vote, a factor that could lead to more volatility in the valuation of its common stock."

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