Blockbuster Stock Surges on News of Announcement

By Frank Heinz
|  Friday, Sep 23, 2011  |  Updated 11:30 AM CDT
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Blockbuster Takes on Netflix, Stock Surges

AP

Blockbuster store, Dallas.

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Dallas-based Blockbuster, now owned by Dish Network, is making some changes that they hope will put it in a better position to battle Netflix.

Those changes are expected to be announced at noon Friday in a much talked about news conference.  The company is expected to announce a streaming platform to rival Netflix.

Netflix has been under heavy criticism after they raised their prices nearly 60 percent (from $10 to $16) for streaming and DVDs by mail.  Some customers were further rankled by Netflix CEO Reed Hastings when he apologized for the way the pricing change was handled and then broke the company into two companies -- Qwikster, which will handle the DVD by mail business, and Netflix, which will handle the streaming side of things.

The company reported that 1 million of the 25 million subscribers Netflix had cancelled their subscriptions.  That number was greater than the company expected and the stock price has since dropped by 15 percent, according to the New York Times.

News of the announcement sent Blockbuster's stock up 40 percent Thursday.

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