With technology making video rental stores redundant, the fate of the video rental company Blockbuster has reached its logical stage. Fighting of the inevitable for years, the company has made its intentions of filing for a Chapter
11 bankruptcy clear in a regulatory filing on Wednesday, if it was unable turn around its present financial crisis.

The announcement was predictably followed by a steep dive in the share prices from an already abysmal 27 cents to a new low of 13 cents. This year has seen at least 40 per cent shaved off, off the company's market value.

Facing stiff competition from online video rental companies such as Netfix, coupled with cable companies that offer on demand movies, Blockbuster has outlined several measures to bridge the $1 billion deficit in its capital requirements. While it was able to overcome a similar situation last year the current forecast is pessimistic.

"It may not be possible to turn Blockbuster's business around. While its high yield issuance last fall appeared to buy it some time, its recent negative revision in guidance and the inroads into its business by competitors bode very ill for its long term health", warned Gimme Credit analyst Kimberly Noland in a note to clients.