Quote:
Originally Posted by jbcohen
What is the likelihood that Barns and Nobles will go out of business?
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Very low.
They still have a lot of Nook equity value to fritter away.
Basically, they've been mortgaging their house to buy groceries.
Since Nook started with a valuation of US$1.8 Billion (on a basis of 25% of the US ebook market) it'll take even the Riggio gang a few years to burn through the rest of the $600 million Microsoft money and the $90 million Pearson money. Plus however much they can get out of the Random Penguin, HCSS, and the rest of the BPHs.
Assuming their marke share actually dropped to 20%, and the valuation to $1.5 billion, the remaining 28% they can sell off without losing control should still bring in about $400 billion if they sell it before their market share drops much further.
I figure they have two years of the same old same old before they actually kill Nook. And long before that, the shareholder lawsuits will force a change.
Of course, that assumes the february report doesn't bring any further bad news. For example, they reported that digital content had increased by 13% but they didn't break it down. If that content increase came from ebook sales along with near-nil video and app revenue, things shouldn't get too bad. But if, once you subtract video and app sales, it turns out the ebook sales declined... on top of hardware decline and pbook declines...
Well, at that point the smelly stuff hits the fan.
At that point, it would be worth looking up the definition of "death-spiral".