Redbox 2007 Annual Report Download - page 19

may result in adverse publicity regarding us, our entertainment service machines and the products we sell. Even if
we successfully defend ourselves against or settle this type of claim, we could be forced to spend a substantial
amount of money in litigation or settlement expenses and our management could be required to spend valuable time
in dealing with these claims. Further, our vendors may not indemnify us against product liability. There is a risk that
claim awards, settlement payments, related costs or associated liabilities may exceed, or fall outside the scope of,
our insurance coverage and we cannot be certain that insurance will continue to be available to us on economically
reasonable terms, or at all. Any imposition, or even possible imposition, of product liability could harm our
business, financial condition and operating results.
Our stock price has been and may continue to be volatile.
Our stock price has fluctuated substantially since our initial public offering in July 1997. For example, during
the twelve months ended February 8, 2008, the closing price of our common stock ranged from $25.00 to $34.50 per
share. Our stock price may fluctuate significantly in response to a number of factors, including:
• the termination, non-renewal or re-negotiation of one or more retailer relationships,
• acquisition, merger, investment and disposition activities,
• operating results below market expectations and changes in, or our failure to meet, financial estimates of
securities analysts or our own guidance,
• release of analyst reports,
• trends and fluctuations in the use of our coin, entertainment and e-payment services,
• period-to-period fluctuations in our financial results,
• announcements regarding the establishment, modification or termination of relationships regarding the
development of new or enhanced products and services,
• announcements of technological innovations or new products or services by us or our competitors,
• ineffective internal controls,
• industry developments, and
• economic or other external factors.
In addition, the securities markets have experienced significant price and volume fluctuations that are
unrelated to the operating performance of particular companies. These market fluctuations may also seriously
harm the market price of our common stock.
Our anti-takeover mechanisms may affect the price of our common stock and make it harder for a third
party to acquire us without the consent of our board of directors.
We have implemented anti-takeover provisions that may discourage takeover attempts and depress the market
price of our stock. Provisions in our certificate of incorporation, bylaws and rights plan could make it more difficult
for a third party to acquire us, even if doing so would be beneficial to our stockholders. Delaware law also imposes
some restrictions on mergers and other business combinations between us and any acquirer of 15% or more of our
outstanding common stock. Furthermore, Washington law may impose additional restrictions on mergers and other
business combinations between us and any acquirer of 10% or more of our outstanding common stock. These
provisions may make it harder for a third party to acquire us without the consent of our board of directors, even if the
offer from a third party may be considered beneficial by some stockholders.
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