JAN. 16 | While the U.S. stock markets experienced a broad sell-off Tuesday, Blockbuster fell particular far, dropping 17%, which had more to do with an announcement in Silicon Valley than Citigroup’s record $18 billion write-down. Apple CEO Steve Jobs had just unveiled a movie rental service on iTunes and a new Apple TV device that would allow users to watch rented movies on iPods as well as on their living room HDTVs.
Blockbuster investors feared that Apple was out to dominate the digital movie space and fled the world’s largest movie rental service — that is until cooler heads prevailed, said analyst Michael Pachter with Wedbush Morgan Securities. They panicked. They thought if Apple is in the market, they’re going to own it, he said. They realized today, no they’re not. In one day, Blockbuster shares regained all of their losses on Wednesday to close 17% higher.
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