Memo to John Antiocco: That Flickering Light You See is Your Career Flaming Out...

Last week I wrote (rather joyfully I might add) about the nonsense that took place during Blockbuster's earnings call. The highlight being Blockbuster's largest shareholder being hung up on during a diatribe toward CEO John Antiocco.

Oh what a difference a week makes. Today during a proxy vote three people lost their board seats to candidates backed by Carl Icahn (who was also voted on to the board). One of the three who lost their seat was Antiocco. Quite an in-your-face for a company CEO. Icahn stated he wants Antiocco to stay on, but his reason are not all altruistic. One is Antiocco's parachute is $54M and there's no way Uncle Carl's ponying up that kinda cash. The second reason is Icahn can now mock, torture and ridicule Antiocco for the next three quarters. The CEO may as well paint a target on his chest to make it easier.

So what does this mean for Blockbuster? Simply the following:
1. Bye-bye online rental business: Antiocco has spent millions (and pledged 150M more this year) to boost Blockbuster's online business. Icahn is no fan of this program and I do not think there is any way he will continue to support it. If he decides to keep the online business, look for him to try to swing a deal to buy NetFlix.
2. A mucho dividend is coming: Icahn is seeking a big time dividend. As an owner of almost 10% of Blockbuster's shares you can see why he would want that one. He's notorious for wringing companies out of cash for dividends and cash rich Blockbuster certainly will have the means to pay out.
3. An LBO (No Reasonable Offer Will Be Refused!): Since taking over another video chain is out (because Blockbuster got beat out by MovieGallery for Hollywood Video) Uncle Carl is going to be combing the halls of Wall Street looking for a buyer. Perhaps it will be the individual he was starting to tell us about last week before Antiocco hung up on him.

Hawk's View: Blockbuster's stock is now a short term play and Icahn (despite preaching patience publicly) will want to cash out this puppy ASAP. Don't be surprised if Blockbuster is not under the ownership of a KKR or Providence Equity Partners by the start of football season.