Struggling Redbox Entertainment has seen its stock price more than double to around $9 a share following an announcement that the company secured a $50 million line of credit.
Redbox, which is enduring an unexpectedly faster decline of its core DVD/Blu-ray rental kiosks business than it is development of revenue from streaming, also announced that CFO Kavita Suthar will exit the company.
Mitchell Cohen, who according to Redbox has served as CFO and COO "at several public and private companies," will take over as interim CFO.
The Chicago native Suthar, a Redbox veteran who joined former parent company Outerwall in 2015, oversaw Redbox's initial public offering via a special purpose acquisition company last October.
Now she's out of a job.
“Kavita played an important role in Redbox’s public listing and provided the sound financial leadership required to navigate the process successfully,” said Redbox CEO Galen Smith. “On behalf of the Board and executive team, I’d like to thank her for her contributions over the years. We wish her the very best in her future endeavors.”
As for the credit line, that was reported to the SEC last week and arrives via a restructured “Voting and Support Agreement” with HPS Investment Partners.
Redbox reported a loss of $140.8 million in 2021 and largely blamed it on COVID-19 damage to the theatrical motion picture pipeline -- less movies in theaters means fewer profitable disc rentals at Redbox's nearly 40,000 kiosks nationwide.
Redbox is trying to ramp up AVOD and FAST businesses to transition its customer base of around 40 million users to streaming.
