Global Axcess (GAXC) will likely become a buy out candidate for Coinstar (CSTR) or NCR

Blockbuster moved even closer to BK  after forecasting a ~$200m net loss for the year.  This further illustrates the the turn in dvd distribution from brick and mortar to kiosk.  Redbox also announced that they will be taking a second pound of flesh out of the wounded Blockbuster by rolling out video game kiosks.  I believe the stage is set for the entertainment kiosk business to boom 2010, and there is no reason why Global Axcess (GAXC) won’t be successful in getting a piece of the pie.  Global Axcess announced themselves as the newest entrant into the DVD kiosk space and expect that 30% of their 4,500 ATM clients would be good up-sell candidates.  With both Coinstar (CSTR) and NCR trading at 25x FY2009 EPS est, GAXC could become become an acquisition target.  With GAXC currently trading at 11x FY 2009 EPS estimates and 6x 2010 est, the stock has a lot of upside from current prices.

Disclosure:  LONG GAXC