UPDATE 1-Carl Icahn further cuts stake in Blockbuster

Thu Apr 8, 2010 7:45am EDT

* Dissolves Class B share stake

* Cuts Class A share stake to 3.5 pct from 3.77 pct

April 8 (Reuters) - Activist investor Carl Icahn dissolved his Class B share stake in Blockbuster Inc BBI.N and further reduced his ownership in Class A shares of the video rental company, according to a regulatory filing.

Icahn, who held 5.65 percent of Class B shares in the company last week, has sold all his Class B holdings, the filing with the U.S. Securities and Exchange Commission showed.

On Tuesday, Icahn sold 48,234 shares of Class A stock at 25 cents each, bringing down his ownership to 3.5 percent, or about 5.2 million Class A shares.

The billionaire investor, who once owned nearly 17 percent shares of Class A stock in Blockbuster, has been reducing his ownership after the company said on March 16 that it might seek bankruptcy protection.

Last week, he reduced his Class A ownership to 3.77 percent and his Class B share stake to 5.65 percent. [ID:nN02163747]

Blockbuster shares closed at 30 cents Wednesday on the New York Stock Exchange. (Reporting by Suzannah Benjamin in Bangalore; Editing by Gopakumar Warrier)