CHAIRMAN QUITS BLOCKBUSTER VIDEO IN SURPRISE MOVE : CHAIN CREATES NEW CLASS OF STOCK.Byline: Mark Landler Mark Aurel Landler (born October 26, 1965 in Stuttgart, Germany[1]) is an American journalist who has been the European economic correspondent of The New York Times, based in Frankfurt, Germany, since July 2002[2]. The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times In a rapid-fire succession of moves that left shareholders reeling, Viacom Inc. said Tuesday that the chairman of its Blockbuster unit had resigned and that it planned to issue a new class of shares to track the performance of the troubled home-video chain. Viacom also warned that Blockbuster's first-quarter cash flow would fall 15 percent to 20 percent from the comparable quarter a year earlier because of a weak lineup of movie titles. The financial and managerial turmoil drove down Viacom's class B shares by 12 percent, to $27.25 each, in furious trading on the American Stock Exchange American Stock Exchange (AMEX) Stock exchange in the U.S. Originally known as “the Curb,” it began as an outdoor marketplace in New York City c. 1850. It moved indoors to its present location in the Wall Street area in 1921. . Executives at Viacom had been weighing plans to spin off Blockbuster for several months, so the announcement of a new class of stock was not a big surprise to analysts. But they were stunned by the abrupt departure of Bill Fields as Blockbuster's chairman after only 13 months. Sumner M. Redstone, the chairman of Viacom, said he and Fields agreed on the change together - in part because Fields, a former Wal-Mart executive, wanted to return to general retailing. People familiar with Fields said he was close to accepting a senior position at a major retailer and would disclose his plans soon. But Redstone said Fields' resignation also would benefit Blockbuster, which has been the squeaky wheel The squeaky wheel is the central concept in the bon mot "It is the squeaky wheel that gets the oil." or "...gets the grease."[1] The "squeaky wheel" may be any problem, irritant, or other attention-getter. in Viacom's family of media properties ever since Redstone acquired it in 1994 to serve as a weapon in his epic takeover battle for Paramount Communications Paramount Communications Media and communications corporation. It was founded (as Paramount Pictures Corp.) by W. W. Hodkinson in 1914 as a film distributor. It became a motion-picture company two years later and won attention with stars such as Mary Pickford, Gloria . Redstone attributed the slowdown in Blockbuster's sales to an unusually paltry lineup of films in the first quarter. He also noted that the company's operations had been disrupted by moving its headquarters from Fort Lauderdale Fort Lauderdale (lô`dərdāl), residential, commercial, and resort city (1990 pop. 149,377), seat of Broward co., SE Fla., on the Atlantic coast; settled around a fort built (c.1837) in the Seminole War, inc. 1911. , Fla., to Dallas. People familiar with Viacom said the spinoff and the resignation of Fields were rooted in Redstone's ambivalence toward Blockbuster. Redstone, a 73-year-old billionaire, acquired the home-video chain only when it became clear that without its cash flow, he would not have been able to outbid out·bid tr.v. out·bid, out·bid·den or out·bid, out·bid·ding, out·bids To bid higher than: We outbid our rivals at the auction. Barry Diller Barry Diller (born February 2, 1942 in San Francisco, California) is an American media executive responsible for the creation of Fox Broadcasting Company. Biography for Paramount. In issuing a new class of Blockbuster shares, Viacom is making a big bet on so-called tracking stocks, which have become a fad on Wall Street in recent years but which have a somewhat dubious record. These stocks are designed to increase shareholder value by separating disparate assets so they can be more easily understood by analysts and investors. |
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