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It's barely a week later ... and the other shoe is falling. Liberty Media is reported to having cold feet about the original offer (which B&N frittered away) of $17/share for the 70% of B&N not owned by the Riggio family. Now, Liberty leakers are suggesting raising the buyout cash is harder than expected (which is almost certainly NOT true), or perhaps it would settle for a minority interest (like the Burkle group which owns 20% and has zero influence over the board?).
Whatever ... the stock closed at $13, the lowest since the original deal was floated, and far, far below the $21 peak since the deal was verified. Today, you could make 30% on your money in a few weeks if you buy shares at $13 and believe Liberty will buy them at $17 this fall. But, hey ... I wouldn't count on it.
Rather more interesting ... B&N, although it has some irons in the fire, is in poor shape financially. It had to suspend dividends earlier this year to ensure it could pay for inventory. It is investing very heavily in Nook, spending far more than it is recovering in revenue (let alone profit). And paper sales of books are drastically down across all publishers. Meanwhile, its chief competitor Borders is closing with 50% off sales which has to be sucking the life out of summer sales at B&N until that disaster is finished (end of August, early September).
Well, "ouch", at the least, is the operative word of the day.
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