Rumors are flying all over the place about the possible bankruptcy of Blockbuster Inc. in the coming year. These rumors caused a fall of 77% for its shares. The shares doubled on Wednesday when the company made it clear that they aren’t going to file for bankruptcy.

Karen Raskopf, Blockbuster spokeswoman, has said that the firm hired Kirkland & Ellis LLP to help them with financial efforts. Blockbuster also mentioned that it has the resources to fund debt during 2009 if it is required. Currently the firm is trying to secure refinancing to make a debt payment that is due in August according to Raskopf.

According to Michael Pachter of Wedbush Morgan, there is no need to panic and bankruptcy isn’t likely for Blockbuster in near future at least. The speculations are allover the market and everyone is waiting for the fourth-quarter results by the company on March 19. Blockbuster business has been facing problems even before the current worldwide economic collapse.

Netfilx Inc, DVD – rental pioneer, has occupied a large market share of Blockbuster since past few years. Blockbuster has been fighting against it but Blockbuster’s pullback in marketing spending ended up giving benefits to Netflix last year.

On the other hand, Blockbuster is also being pressurized by Apple Inc because Apple started to offer a movie-download rental service through iTunes online store since last year.

Blockbuster operates more than 7,500 stores worldwide and hopefully will not go bankrupt.

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