redbox (Photo credit: kalebdf)

Is It Wise To Invest In Redbox?

Outerwall, the company behind Redbox, has recently announced that Anne Saunders (President of the Redbox unit) has left the company and that her place is temporarily being filled by Redbox's existing executive team. In addition, the company has announced that it will be reducing its workforce by about eight and a half percent. The ailing company is responding to calls for restructuring, but the question must be asked - is it wise to invest in Redbox?

One good rule of stock investing is that one should always seek out stability. While a leadership change-up can be a good thing, the fact that the company has not filled Saunders' spot with a permanent choice should worry investors. Likewise, the rather large reduction in staff does point towards more monetary troubles in the company. Coupled with the fact that the parent company is closing several other less-successful ventures, one receives a clear picture of a business that is still in trouble. Despite the restructuring efforts, the company is still not a prime target for stock investing.

The only reason to invest in Outerwall is a belief that the company's future plans will come to fruition quickly. As the business features increased competition from on-demand and streaming services, it seems unlikely that even Redbox's streamlined business model can remain standing for long. Outerwall might represent a good short-term investment for those hoping for a quick rebound upon the announcement of a new Redbox unit president, but it is likely unsuitable for any type of long-term investment.