Quote:
Originally Posted by jbcohen
What is the likelihood that Barns and Nobles will go out of business?
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Fairly high.
In-store sales are down, which may mean more store closures. That means lower revenue, fewer places to push the Nook (which may be a saturated market already), and a black eye to the brand.
The Nook business has never turned a profit, and has cost B&N immense amounts of money -- around $50 million a quarter. At that rate, they'll burn through that cash in about one more year.
Their numbers aren't as bad as Borders were, management is still stable, and Microsoft's investment is almost certainly on better terms than anything offered to Borders. But I'd say their chances of survival are small, and if they can't turn it around by this time next year, then they're done.
And that's why their stock price is around $13 instead of $259.