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Headquartered in Illinois, Redbox Entertainment (NASDAQ:RDBX) operates a network of self-service kiosks where consumers can rent or purchase movies. These movies are typically on DVD or Blu-ray, though Redbox also provides content streaming services. Chicken Soup for the Soul Entertainment (NASDAQ:CSSE) has agreed to acquire Redbox, and investors can prepare for this event by holding a few shares of RDBX stock.
In a time of persistently high inflation, there’s absolutely no shame in being value-conscious. Is it possible for film fans to find good value nowadays, though? Indeed it is, as Redbox offers affordable access to fresh film releases through physical formats as well as streaming.
It won’t be long before Redbox undergoes a major transition which current and prospective investors need to know about. The result will, most likely, be a powerhouse in the streaming market – and a prime buying opportunity for enterprising traders.
What’s Happening with RDBX Stock?
First things first. There’s no denying that some folks will pigeonhole RDBX stock as just a meme stock. That’s because the stock is a fast mover, is fairly low-priced and might or might not be a target of Reddit-fueled short squeezes.
It’s difficult to predict what Reddit traders will do. What we can establish, though, is that Redbox shares have been as low as $1.61 and as high as $27.22 during the past year. Therefore, prepare for action and adventure — and please, keep your position size small — if you’re going to invest in Redbox.
On the financial side of the equation, Redbox generated $63.23 million in net revenue during 2022’s first quarter. Furthermore, the company ended the quarter with $13.66 million in cash, cash equivalents and restricted cash. So far, so good.
Redbox’s investors should also know that the company is undergoing a CFO transition. Kavita Suthar has stepped down from this role, and Mitchell Cohen is serving as Redbox’s interim CFO. No further updates have been provided on this matter yet, so it’s a good idea to check back frequently.
Marking an Inflection Point
The CFO transition won’t likely be the biggest change for Redbox this year, though. In an event that could impact the streaming market generally, Chicken Soup for the Soul Entertainment is preparing to acquire Redbox.
This proposed transaction is expected to close in 2022’s second half. However it’s “subject to the receipt of required regulatory approvals and other customary closing conditions.” Still, the buyout seems very likely to happen and it should result in a combined company with a “massive content library, more than 38,000 kiosks nationwide” and “extensive digital capabilities.”
Moreover, the combined company could create a financial windfall, with expected annual-run rate cost synergies exceeding $40 million in 2023. Additionally, current holders of Redbox shares could end up owning CSSE stock shares instead, so be prepared for that.
What You Can Do Now
The second half of 2022 is almost upon us, and there’s a big change in the works. It hasn’t been finalized yet, but Chicken Soup for the Soul Entertainment’s takeover of Redbox is likely to produce a powerful streaming-market contender.
Before this monumental event takes place, investors might consider buying a few shares of RDBX stock. After all, there’s no need to dream about memes when the Redbox acquisition could soon put some green on your screen.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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