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Originally Posted by JJoyce
This is possibly the most inane, delusional and just "out there" rambling I've possibly read in the last three months.
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Did you happen to make similar statements about Borders any time in the year or two before they went belly up?
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Originally Posted by JJoyce
For those self proclaimed amateur financial wizards out there pulling a fantastic chicken little act, it's worth noting that investors AREN'T "freaking out" and it certainly has nothing to do with Lynch's statement regarding exploring options with the nook side of the business.
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For most of December, their stock price was around $15. Now it's closer to $11 -- and staying there. I believe it hasn't been this low since... 1994?
Yeah, that's a "freak out."
(By the way, the title of the thread was is the exact title from a WSJ blog entry, which was posted at 9AM when the stock was down 29%.)
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Originally Posted by JJoyce
Understandably, the market didn't like that too much. So Lynch gets sent out to let investors know that the digital side is doing very well and therefore B&N is looking at its options for capitalizing on that success.
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Wow, you're pretty good at spin. Do you do this for a living?
Now, I'm definitely not doing equity research for JP Morgan -- and wouldn't be posting my opinions on an ebook forum if I was. That said, B&N does not have a rosy future.
They've lost almost $100 million since Q2 2009, and posted losses 8 out of the past 10 quarters; during that same time period, Amazon posted $2.33 billion in net income, and had no negative quarters. They're revising earnings down for 2012; they were unable to find a buyer earlier this year; Liberty openly admitted that investing in B&N was a "flyer." B&N certainly did not announce they're selling the Nook division next week, but breaking it out as a separate business does make that an easier option.
Plus, some of us have seen this before. B&N's in-store sales will likely pop up a bit for Q4 2011 -- because Borders disappeared earlier this year. However, as digital sales increase, the physical stores will lose sales and be harder to sustain. Their online division has never matched Amazon, nor has the Nook.
Now, in many respects B&N is much better off than Borders. Despite the proxy wars last year, they have a much more stable management; debt hasn't skyrocketed; they learned from their massive mistakes in developing online sales.
Still, their core business -- brick and mortar stores -- is slowly sinking, and it is fairly likely that it will take most of B&N down with it. (It's not going to end up much different than the music biz, and where can buy CD's now? Best Buy, Walmart and online.) I wouldn't be surprised in the slightest if they announce store closures in January or February.
Thus B&N will likely survive in some form, but it is already a shadow of its former self -- long gone are the days when they struck terror into the entire industry with a proposed merger with Ingram.
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Originally Posted by JJoyce
Bottom line...do you due diligence before leaping along with the other lemmings. There's a reason for the buy and strong buys outnumbering the sells.
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What is this, a Yahoo stock message board?