Barnes & Noble is putting itself up for sale, igniting debate
among stock-watchers and bookworms alike. There's much to discuss
here, from the business strategies to Julie Bosman
suggestion in The New York Times that this "might be the latest sign of
trouble for brick-and-mortar bookstores." Here's the first round of
- Translating the Company Statement "The bookseller says it wants to increase shareholder value," writes Business Insider's Gregory White and Jay Yarow.
"That likely means selling off some of their legacy locations, real
estate where they aren't selling enough books, and focusing on growth
portions of the business, like the Nook and its online store."
Immediate Impact for Readers and Investors "The sales process won't
mean much for consumers right away," predict The Wall Street Journal's Jeffrey Trachtenberg and Dennis Berman,
"[b]ut a new owner may have a different strategy, potentially trimming
the number of outlets as profits slide." Both the Wall Street Journal
team and the Business Insider team also notice the quick jump in Barnes
& Noble shares following the company's announcement.
Decline of Paper and Ink? "I don't really have concern one way or
another about particular companies or in this case the book mega-store
chain, Barnes & Noble," writes the generally politically-focused Josh Marshall
at Talking Points Memo. "But the news that B&N is considering
putting itself up for sale is, I suspect, a telling moment in history
and fate of the physical book."
- Newsflash: Barnes & Noble
Is Finished, Along With Retail Book Industry "The company will explore
'strategic options' which means that the value of Barnes & Noble's
priced peaked some time ago along with its prospects," writes 24/7 Wall
St.'s Douglas McIntyre
in an strongly-worded post. "It needs to be private which
would allow fools who believe in the retail book business to run the
firm without damaging shareholders." He expands on the point:
brands often lose their value. The board did not own up to the fact
that Barnes & Noble's best days are behind it. E-readers, tablet
PCs, and e-books have permanently undermined the value of the company's
750 bookstores and 637 college outlets. And Barnes & Noble's net
income is moving in the direction of zero. In an investment banker's
world, the value of the company based on its future prospects may be
zero. ... It has been written too often that it is hardly worth
repeating. The retail book industry is dying and is another of a long
list of businesses savaged by the internet and the age of digitization.
It is an age which already has its winners in Amazon.com ..., Apple
Inc. ... , and Google Inc. .... Books run on tiny chips on small
screens, and at least fewer trees are cut down.
- This May Be More About One Man, writes Sarah Weinman
at Daily Finance. She explains the struggle after shareholder Ron
Burkle filed a suit against the Barnes & Noble board "for
triggering a 'poison pill' when the billionaire's big stock grab last
fall nearly hit 20%." The Delaware Chancery Court is about to announce
an opinion, and "Barnes & Noble's announcement suggests they
believe the judge's verdict won't go their way. By putting itself up
for sale, Barnes & Noble also effectively deflates whatever the
Delaware Court decides." Burkle may well make a play to buy the company
now, but, despite his "proven" ability to "litigate when the need
arises"--read: when he doesn't get his way--the board seems predisposed
against him, Weinman explains. Most commentators agree the board's sympathies seem to lie with Burkle's rival, shareholder Leonard Riggio.
- Will Borders Make a Move? In a separate piece, Weinman
brings up an intriguing idea. Rival book retailer Borders just finished
another round of layoffs. "As strategies go, a new round of layoffs
can't help but signal desperation, or at least a profound lack of
ideas," writes Weinman, "[w]hich is why we're entertaining the notion
that [chief Borders shareholder Bennett] LeBow may pull a trick from
his corporate raider playbook and put in a bid to buy Barnes &
Noble." Crazy? Not entirely: "He used that very tactic in the mid-1980s
when, as owner of computer company MAI, he tried to buy larger
competitor Prime Computer in a hostile takeover bid ... as Hail Mary
moves go, Borders gunning for Barnes & Noble would be the ballsiest
play of all -- even if the end result might imperil both book
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