The rats are running for the lifeboats at Blockbuster

Home Media Magazine reports that Mark Wattles has sold more than 1.7 million shares of Blockbuster stock for a grand total of $230,741, or an average price of just a little over $0.13 per share. Blockbuster CEO Jim Keyes sold more than 245,000 shares at a price of $0.18 each, for a total of $44,100. According to the article, he still holds more than 1.8 million shares, which if valued at what Wattles got for his sale, would be worth a bit more than $234,000.

Blockbuster's stock has been delisted by the New York Stock Exchange and its biggest holders are dumping their shares while they still have some value. Even though the company claims to have avoided bankruptcy through a one-month reprieve in debt payments from creditors owed $440 million of the company's $920 million in total debt, Wattles's and Keyes's stock sales indicate that they don't believe that the company will be able to stay out of bankruptcy court. Based on first-quarter earnings, the company is on track to have less than $100 million in earnings this year before interest, taxes, depreciation and amortization--not enough to cover scheduled interest and principal payments on its outstanding debt.

Laughing on the Outside, Crying on the Inside

This isn't a financial blog, but it's no secret that both the NYSE and NASDAQ markets are in bear territory, banks are failing, tens if not hundreds of thousands of people are losing their homes, unemployment is up, and the economy is a mess. So when I turned on CNBC this afternoon, why did I see a bunch of nimrods at both markets smiling and clapping, when they both closed down yet again? Can't they put the "clap & smile" at the market close on hold for a while? It makes it look like Nero is in charge of our financial markets.