Quote:
Originally Posted by Fbone
B&N same store sales up 2.5% and the doomed analysis by brokers and public causes stock to drop 17%.
Best Buy same store sales drop 1.2% and analysts happy because BB sales were only slightly worse than expected bringing stock price up 3%.
Difference is BB is still profitable. Markup on mobile phones, tablets, appliances, ereaders and movies saved them.
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also, i think that same store sales were up for B&N but a lot of that is because of the borders bankruptcy. so perhaps, analysts thought it would do better. the other issue is that they warned that the ereader fell short of expectations and the nook business still isn't profitable despite being highly successful in terms of market share in the US. when does it become profitable? the other thing is that the same store sales are up because the nook sales are up, partly. but how is the core non-nook biz doing, excluding the borders bankruptcy effect?
amazon can scale the kindle globally, whereas B&N cannot. amazon can take losses on the kindle by cross selling a lot of other products. B&N cannot. amazon is a tech company. it is their dna. B&N is not.
if the nook fails, B&N is in trouble (unless they sell it for a nice price, which is what they might do). if the nook succeeds, B&N's stores are likely in trouble because of the shift to ebooks. so, actually selling the nook at a fair price and doing commercial agreements makes some sense in that it gets out of this lose-lose situation. the nook also requires a lot of advertising and tech investment, which B&N might not be able to afford....