Milberg Weiss Files Class Action Suit Against Blockbuster Inc

Business Wire, Feb 24, 2003

Business Editors/Financial Analysts

SAN DIEGO--(BUSINESS WIRE)--Feb. 24, 2003

Milberg Weiss (http://www.milberg.com/cases/blockbuster/) today announced that a class action has been commenced in the United States District Court for the Northern District of Texas on behalf of purchasers of Blockbuster Inc. ("Blockbuster") (NYSE:BBI) publicly traded securities during the period between April 24, 2002 and Dec. 17, 2002 (the "Class Period").

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from February 12, 2003. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, contact plaintiff's counsel, William Lerach or Darren Robbins of Milberg Weiss at 800/449-4900 or via e-mail at wsl@milberg.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.milberg.com/cases/blockbuster/. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges Blockbuster and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Blockbuster is a provider of rentable home videocassettes, DVDs and video games, with nearly 8,000 stores in the United States and 26 other countries as of Dec. 31, 2001. The complaint alleges that during the Class Period, defendants issued a series of positive representations regarding the Company's financial performance and future prospects. These statements were each materially false and misleading, as they misrepresented and/or omitted the following true facts which were known by each of the defendants, but concealed from the investing public: (a) The Company was being negatively affected by a decline in rental game margins, 50% vs. 66% in the comparable quarter; (b) The Company's fiscal 2003 projections factored out the Video-on-Demand impact on the Company's revenue and income; (c) The Company's core rental business was eroding as the purchase price of DVDs had steadily declined and consumers were induced to "purchase" as opposed "rent" DVDs, a less profitable business for the Company; and (d) That as a result, defendants did not and could not have genuinely believed their projections for the Company's financial results for fiscal 2002 and beyond were accurate when made.

As a result of defendants' false statements, Blockbuster's stock price traded at inflated levels during the Class Period, increasing to as high as $30 per share on May 2, 2002, whereby defendants sold more than $13 million worth of their own shares.

Plaintiff seeks to recover damages on behalf of all purchasers of Blockbuster publicly traded securities during the Class Period (the "Class"). The plaintiff is represented by Milberg Weiss Bershad Hynes & Lerach LLP, who has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Milberg Weiss Bershad Hynes & Lerach LLP, a 190-lawyer firm with offices in New York, San Diego, San Francisco, Los Angeles, Boca Raton, Fla., Seattle and Philadelphia, is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers and companies, as well as victims of World War II and other human rights violations, and has been responsible for more than $30 billion in aggregate recoveries. The Milberg Weiss Web site (http://www.milberg.com) has more information about the firm.