Bloomberg: Borders May file for Bankruptcy

fjtorres · 02-02-2011, 07:44 AM

http://www.bloomberg.com/news/2011-0...next-week.html

The promised $550M funding from GE Capital is contingent on Borders getting $300M worth of concessions from publishers and creditors.

In a sign of how likely that is, Borders is preparing to file for Chapter 11 and close 150 of their 650 stores.

Borders stock dropped 26%, B&N stock moved up 7%.

The death spiral moves to the next level as Borders' staring contest isn't making anybody blink just yet.

Grimm · 02-02-2011, 01:44 PM

A shame about Borders but I'm glad to see B&N stock on the rise a bit.

DMcCunney · 02-02-2011, 07:05 PM

This is hardly a surprise. The question was not if Borders would file for bankruptcy, but when. They are basically out of options.

I do note that the offer by the hedge fund that owns about 40% of Borders to help find the money for Borders to acquire Barnes and Noble seems to have evaporated. No surprise there, either: I couldn't see them providing the funding alone, but couldn't imagine why anyone else might pony up.
______
Dennis

SensualPoet · 02-02-2011, 07:17 PM

The hedge fund's offer to merge Borders with B&N was bizarre -- but then none of us knows the actual details. I doubt if the fund's interest in Borders has evaporated: the GE Capital deal, too, shows there are levers to pull that seem attractive to new money. (Hands up anyone here willing to toss $1000 into the kitty to buy shares?) But it sure doesn't look pretty and, while the word is over-used in both political and financial circles, desperate does seem to apply. At least for those currently in charge and with current cash invested.

DMcCunney · 02-02-2011, 07:42 PM

Quote:

Originally Posted by SensualPoet

The hedge fund's offer to merge Borders with B&N was bizarre -- but then none of us knows the actual details. I doubt if the fund's interest in Borders has evaporated: the GE Capital deal, too, shows there are levers to pull that seem attractive to new money. (Hands up anyone here willing to toss $1000 into the kitty to buy shares?) But it sure doesn't look pretty and, while the word is over-used in both political and financial circles, desperate does seem to apply. At least for those currently in charge and with current cash invested.

The only motive I could see for the hedge fund offer was to do what hedge funds do: merge the enterprises, eliminate redundancies, close stores, trim staff, try to firm up the balance sheet, and drive the stock price up to a point where they could cash out at a profit. The longer term health of the merged entity would be another matter, but once out, they wouldn't care.

Border's stock price did rise briefly on the announcement, and I suspect the hedge fund took the opportunity to reduce their holdings while it did, but I couldn't really see the offer as serious - Borders was already on life support, and a worsening of its condition would simply move the idea from "highly unlikely" to "flatly impossible". It's condition worsened, so...

If I were the hedge fund, my interest would be disposing of my holdings in Borders Group with as little additional loss as I could manage. With Borders' stock dropping 36% to .47/share, that won't be easy. Hard to imagine who would take it off their hands, or why.

Bankruptcy will make the required store closings easier, which is probably one major incentive to attempt it.

But yes, I think "desperate" is an applicable term.
______
Dennis

Kris777 · 02-02-2011, 07:55 PM

I have unused $50 Borders gift card ...

mbelec · 02-03-2011, 06:11 AM

I'm using my cards up.

emonti8384 · 02-05-2011, 08:03 AM

The only bookstore around is Borders, which is about a 1/2 hour from where I live and the only Barnes and Noble is an hour away. Although I read from my ereader I still go to the bookstore and buy books and love going to a real live bookstore. I hop they don't close mine down, lol!

J. Strnad · 02-06-2011, 02:11 PM

Quote:

Originally Posted by Kris777

I have unused $50 Borders gift card ...

Congratulations. You own the company.

Now, about those debts....

Connallmac · 02-06-2011, 05:34 PM

Quote:

Originally Posted by J. Strnad

Congratulations. You own the company.

Now, about those debts....

I'll check the score board, but you may have just won the internet!

queentess · 02-07-2011, 04:29 PM

Just used my $25 gift card today... nearly all the books on my wishlist were either unavailable at my local Borders (with a 4 week order wait), or they were significantly more expensive than Amazon ($9+). So I just went to the store and browsed until I found something. Then I had to wait for 20 minutes in line because there was only one cashier. Then I was accosted on the way out and had my (very small) purse checked for theft. (Did I really look that shady, Mr. Rent-a-Cop?) So long, Borders, and thanks for not much!

Here's an explanation of the lead-up to the probable bankruptcy.

blt50203 · 02-07-2011, 05:43 PM

Quote:

Originally Posted by J. Strnad

Congratulations. You own the company.

Now, about those debts....

shorttimer1 · 02-11-2011, 04:13 PM

Looks like Borders will file next Monday or Tuesday according to the Wall Street Journal. I would make certain your gift cards are used up.

http://www.msnbc.msn.com/id/41536256...siness-retail/

tubemonkey · 02-12-2011, 04:36 AM

Quote:

Originally Posted by shorttimer1

Looks like Borders will file next Monday or Tuesday according to the Wall Street Journal. I would make certain your gift cards are used up.

And if you want a $100 Kobo, get it now; because Walmart sells them for $129.

02-02-2011, 07:44 AM	#1
fjtorres Grand Sorcerer Posts: 11,732 Karma: 128354696 Join Date: May 2009 Location: 26 kly from Sgr A* Device: T100TA,PW2,PRS-T1,KT,FireHD 8.9,K2, PB360,BeBook One,Axim51v,TC1000	Bloomberg: Borders May file for Bankruptcy http://www.bloomberg.com/news/2011-0...next-week.html The promised $550M funding from GE Capital is contingent on Borders getting $300M worth of concessions from publishers and creditors. In a sign of how likely that is, Borders is preparing to file for Chapter 11 and close 150 of their 650 stores. Borders stock dropped 26%, B&N stock moved up 7%. The death spiral moves to the next level as Borders' staring contest isn't making anybody blink just yet. Last edited by Dr. Drib; 02-02-2011 at 08:31 AM. Reason: Added "May"

02-11-2011, 04:13 PM	#13
shorttimer1 Enthusiast Posts: 41 Karma: 762676 Join Date: Feb 2011 Device: Kindle KB X3 Kindle Fire HD 32GB	Looks like next Mon-Tue according to the WSJ Looks like Borders will file next Monday or Tuesday according to the Wall Street Journal. I would make certain your gift cards are used up. http://www.msnbc.msn.com/id/41536256...siness-retail/

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
How do I use "URLLink.acsm" file from Borders.com? (ADE in Wine)	KenJackson	Sony Reader	31	10-07-2011 03:25 AM
Polymer Vision is declared Bankruptcy	Zarkov	News	1	07-16-2009 10:04 AM
Short Fiction Fitzgerald, F. Scott: Emotional Bankruptcy. v1. 04 Jan 09	Dr. Drib	BBeB/LRF Books	0	01-04-2009 11:08 AM
Borders on RTf/TXT file	horseyride	Sony Reader	8	11-14-2007 10:44 AM

02-02-2011, 01:44 PM	#2
Grimm DRM killer Posts: 471 Karma: 793120 Join Date: Oct 2010 Location: Just northeast of Atlanta, GA Device: ASUS Transformer Prime (Sold: Nook, Kindle 3, Nook Color, Nook STR)	A shame about Borders but I'm glad to see B&N stock on the rise a bit.

02-02-2011, 07:05 PM	#3
DMcCunney New York Editor Posts: 6,384 Karma: 16540415 Join Date: Aug 2007 Device: PalmTX, Pocket eDGe, Alcatel Fierce 4, RCA Viking Pro 10, Nexus 7	This is hardly a surprise. The question was not if Borders would file for bankruptcy, but when. They are basically out of options. I do note that the offer by the hedge fund that owns about 40% of Borders to help find the money for Borders to acquire Barnes and Noble seems to have evaporated. No surprise there, either: I couldn't see them providing the funding alone, but couldn't imagine why anyone else might pony up. ______ Dennis

02-02-2011, 07:17 PM	#4
SensualPoet Wizard Posts: 2,302 Karma: 2607151 Join Date: Nov 2009 Location: Toronto Device: Kobo Aura HD, Kindle Paperwhite, Asus ZenPad 3, Kobo Glo	The hedge fund's offer to merge Borders with B&N was bizarre -- but then none of us knows the actual details. I doubt if the fund's interest in Borders has evaporated: the GE Capital deal, too, shows there are levers to pull that seem attractive to new money. (Hands up anyone here willing to toss $1000 into the kitty to buy shares?) But it sure doesn't look pretty and, while the word is over-used in both political and financial circles, desperate does seem to apply. At least for those currently in charge and with current cash invested.

02-02-2011, 07:55 PM	#6
Kris777 Banned Posts: 1,767 Karma: 2520493 Join Date: Oct 2008 Device: Nexus 7, jetBook-Lite, jetBook mini, Toshiba Thrive, JETBOOK COLOR	I have unused $50 Borders gift card ...

02-03-2011, 06:11 AM	#7
mbelec Addict Posts: 209 Karma: 1165996 Join Date: Dec 2009 Location: Maine Device: sony prs-350, Ipad 3	I'm using my cards up.

02-05-2011, 08:03 AM	#8
emonti8384 browneyedgurl Posts: 523 Karma: 356470 Join Date: Dec 2008 Location: Warren, OH Device: PRS-505/950x2, PRS-600 silver, Galaxy III purple, T2 black	The only bookstore around is Borders, which is about a 1/2 hour from where I live and the only Barnes and Noble is an hour away. Although I read from my ereader I still go to the bookstore and buy books and love going to a real live bookstore. I hop they don't close mine down, lol!

02-07-2011, 04:29 PM	#11
queentess Reading is sexy Posts: 1,303 Karma: 544517 Join Date: Apr 2009 Device: none	Just used my $25 gift card today... nearly all the books on my wishlist were either unavailable at my local Borders (with a 4 week order wait), or they were significantly more expensive than Amazon ($9+). So I just went to the store and browsed until I found something. Then I had to wait for 20 minutes in line because there was only one cashier. Then I was accosted on the way out and had my (very small) purse checked for theft. (Did I really look that shady, Mr. Rent-a-Cop?) So long, Borders, and thanks for not much! Here's an explanation of the lead-up to the probable bankruptcy.

Advert

Advert