Quote:
Originally Posted by Kali Yuga
I doubt qualifying it as "free cash flow" makes much of a difference.
Especially since net income happens to be tanking.
Net income has been dropping for the last few years: From $150m in 2007 down to $36m in the 52 weeks ending June 2010. Net income was negative 3 out of the last 5 quarters, including a loss of $35m or so in the most recent quarter.
I.e. if this keeps up, they can't pay the dividend from liquid holdings, and given their debts and prospects it's not a good plan to borrow just to pay the dividend.
Again if taken in isolation, not the kiss of death. However they have a strong competitor with significantly lower overhead and diverse revenue sources that's claiming 70% or more of the ebook market, is selling out of ebook reading devices, and counters B&N's every move; a new competitor with a huge brand presence; declining brick & mortar sales; stock price tanking; management fighting a major investor; substantial debts; no one is publicly expressing interest in buying them, other than people who are already heavily invested. The bad news is piling up.
Did I leave anything out?
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Egads man, the announcement the other day wasn't a Going out of business announcement, but you keep protraying it as it is one.
This happens in business all the time. Company's go private, take on more ownership.
We have no idea how much is going to be up for sale.
I know as a Kindle fan boy nothing would make you happier, though not wanting competition is beyond me. if not for the Nook you'd still be paying $269 and no wi fi only Kindle.
This decision did not come overnight.
Do you think it makes alot of sense to add an additional device to their Nook line up
roll out nook study platform
being commited to software upgrades and performance improvements. 4 upgrades to the nook in 8 months, that's pretty impressive.
keep expanding their e-book llibrary
have a Free summer book program for the nook and bn apps.
Work with Apple to create an app for Apple products
Just unveil the Android App
Just announce that they are commiting more floor space for Nook displays, tutorials, hosting nook classes etc.
and then decide "Oh you know what, let's scrap everything and go out of buisness"
It's about increasing capital and making the tough decisions now and not have to end up like how Borders was a couple of years ago which was on the brink of folding for not doing something earlier.