Quote:
Originally Posted by mcrow24
Not to mention these companies are at very different scales:
B&N: $2b profits
Amazon: $8b Profits
Google: $30b Profits
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Nitpicking? There is a vast difference between profits and sales. Google has lots of profits and lots of sales. Amazon has decent profits (but thin margins) and lots of sales. B&N has tiny profits and modest sales given it has 1340 store locations between its mall and university businesses. Its Q3 EBITDA ("operating profits", the cash you have to reinvest in the business and to pay taxes and dividends) was $170 million -- for the three months ended Jan 29 which includes the important holiday sales. The company is so cash strapped it suspended the quarterly dividend, needing the cash to keep the company afloat. (Necessary evil: it screws the shareholders in the short-term.)
Its modest successes in digital media, and its genuine hit product Nook, is what has attracted John Malone's Liberty Media group to offer to buy out the company for $1 billion provided existing management hangs around. It's a generous offer but, unlike Borders, B&N is merely on the edge of desperate times, not yet consumed by them. To illustrate:
At Jan 29, B&N --
was owed $356 million in uncollected payments
held $1.6 billion in inventory
... which is about $2 billion in current assets
But it also owed $1.2 billion to suppliers
and held a further $790 billion in accrued liabilities
... which is about $2 billion in current debt
B&N has very little "profit" to work with to transform itself and avoid the Borders fiasco. But ... that's not the same as saying it's hopeless, especially with a new serious investor in the wings and one that might bring strategic synergies (as opposed to investment hedge vultures who seek to grab any existing value and spit out the remains as quickly as possible).