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Originally Posted by Kali Yuga
Whatever Burkle has planned, it's unlikely that skipping on the Nook / ebooks would have improved the stock price, and halting the Nook certainly won't get the price back up to where it was when he bought B&N. In fact, ebook sales are one of the few bright spots in their latest results.
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From
New York Magazine:
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Burkle is interested in Barnes & Noble’s formidable brand and its valuable real estate, but he’s not particularly passionate about books... “I think people will continue to buy books,” Burkle said. “But even if we’re wrong, Barnes & Noble will still be alive for five or ten more years. ...
Len Riggio knows where he wants Barnes & Noble to end up: in a world, perhaps just over the horizon, where selling books is profitable, whether they are physical or digital, sold in stores or online. ... People involved with the Nook’s development say Riggio threw himself into the process, and now he sees digital bookselling as the continuation of a lifelong theme.
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Selling off the NOOK/e-book operation would give a bump to the stock price, both from the money taken in and the removal of the ongoing costs. Reading between the lines in the B&N Fiscal 2010 Annual Report, it looks like B&N spent somewhere around $100 million to get their e-book store and NOOK off the ground, plus more than $15 million to buy Fictionwise. Last year B&N reported a profit of $37 million, so the digital initiative seriously cut into their annual profit.
B&N is looking to spend even more than that on the digital initiative this year (Morningstar says $140 million). B&N's guidance indicates that they might break even this year except for the digital initiative and the legal costs of fending off Burkle. Add in any income from selling the digital operation, and B&N becomes profitable.