Quote:
Originally Posted by SensualPoet
Well, Borders just reported a dismal Q3 ending Oct 30 ... hardly the profile of a white knight about to swoop in and save the damsel B&N. Nonetheless, if the hedge fund has $1 billion burning a hole in its pocket, Borders and B&N may yet dance. But same store sales for Borders were down 13% ... crickey!
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I think Pershing is looking at throwing good money after bad. As you mentioned, they own 41% of Border's stock, counting in warrants. I don't know what they paid to get that stake in the first place, but I'm quite sure they are watching the value of their stake plummet.
What can they do? They can watch the value decline to nothing. They can attempt to sell, and take nasty losses. (Who would
buy Borders stock?) Or they can roll the dice, finance a takeover of B&N, and hope to boost the combined entity's stock price enough to sell out at a profit.
Crikey indeed.
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Dennis