NEW YORK — Blockbuster rose 17 percent in New York trading after Mark Wattles took a 5.7 percent equity stake in the world’s biggest video-rental chain and expressed confidence that the company can meet its obligations.
Wattles’ Capital Management acquired 4.84 million shares of Dallas-based Blockbuster, while HKW Trust, which Wattles controls, bought 2 million, according to a regulatory filing Monday. The shares, which declined 68 percent last year, jumped 11 cents to 76 cents in New York Stock Exchange composite trading.
Blockbuster, which has faced increased competition from mail-order company Netflix, said this month it hired law firm Kirkland & Ellis for advice on refinancing and capital-raising and didn’t intend to file for bankruptcy.
Wattles, left, who founded the Hollywood Video chain and sold it in 2005, said investors are “overly concerned” about Blockbuster’s financial stability. In the filing, he said he “fully supports” management.
Wattles also is chairman of Thornton-based Ultimate Acquisition Partners, parent of Ultimate Electronics.
“In this business, there are a number of levers you can pull to decrease capital expenditures,” Wattles said. “It won’t have a long-term impact on the performance of your stores or the customer experience.”
