01-05-2012, 09:14 AM | #1 |
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WSJ: Investors Are Freaking Out About Barnes & Noble
Uh oh. Barnes & Noble cuts its financial guidance again, and now it is saying it may push its Nook e-reading business into a new company. Investors are not pleased.
Barnes & Noble shares are slumping 29% in pre-market trading as Barnes & Noble reduced its fiscal-year guidance. Barnes & Noble said it is evaluating its reporting segments, which may mean the company will report Nook as a separate line item, and it is looking at options to push the Nook into a separate business altogether. Barnes & Noble said Nook device sales surged 70% during the 9-week holiday period ended Saturday, with the bookseller saying tablet sales exceeded expectations though Simple Touch lagged. rest: http://blogs.wsj.com/deals/2012/01/0...-barnes-noble/ |
01-05-2012, 09:23 AM | #2 |
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I was shorting this stock a few weeks ago at $16 through a derivative. I'm kicking myself because I took it off too soon. Damn, the stock is below $10 now. I hate being right but not being able to capitalize on it because of lack of confidence.
About ~1.5yrs ago, I predicted this company would go out of business within 5 years. I'm keeping my original time table...they have ~3.5 yrs left. So HP, RIMM, and Dell, et al, all failed with their tablets but B&N is going to succeed and do enough to save their Bricks and Mortar business? I don't see them hanging onto their market share. Also, is there really enough synergy between the Nook and the stores to justify keeping the stores open 2 years down the road when they are completely dead weight? Their core business is deteriorating. The synergies between the two could easily be accomplished through a commercial agreement with any store with wifi, the nook and other physical books can be sold online, electronics retailers can sell the nook retail. Last edited by markbot; 01-05-2012 at 11:19 AM. |
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01-05-2012, 09:45 AM | #3 |
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Becoming a "kiosk" business, a permanent presence in a larger store or mall, allowing them to sell books and devices physically and online, would probably work for B&N. It could allow them to branch out into markets that did not merit a full store, and actually gain in visual presence, like the ubiquitous cell phone and accessory stores and kiosks.
It would be a severe restructuring of the retail level, but probably worth the effort in the long run. |
01-05-2012, 10:05 AM | #4 |
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Putting nook in a separate business would just about doom their stores, wouldn't it? Since they were doubling down on nook saving the company.
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01-05-2012, 10:29 AM | #5 |
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Don't need large bookstores anymore, nor do we need multiple locations in a given area. As ebook use continues to rise, bookstores and libraries will need to trim down and consolidate services not best served online.
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01-05-2012, 10:41 AM | #6 |
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I will cry when our local B&N closes. I want to run right over there and buy something right now. (well I did just spend money in the cafe just yesterday).
On a side note: what kind of bad/informal writing do they have in the Wall Street Journal these days?? I thought the OP was a paraphrase, but it's the actual article. Uh-oh indeed. eP |
01-05-2012, 11:18 AM | #7 | |
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Quote:
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01-05-2012, 11:19 AM | #8 |
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01-05-2012, 11:27 AM | #9 |
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B&N Looks to spin off Nook
Via MSNBC:
http://bottomline.msnbc.msn.com/_new...-nook-business No surprise here; the clues were all over for the past six month. Nook is a billion dollar a year business. The concern, of course, is that if Nook alone is worth more than the entire B&N as currently consituted, the B&M operation has negative value. Do note, that they face a "shortfall" of Nook STR sales. It sold well; they epected and stocked up for more. Explains where all the refurbs are coming from. Expect more bargain sales. I wonder if anybody will step up, ala Rakuten... |
01-05-2012, 11:29 AM | #10 |
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I still think the death of bookstores is over-exaggerated. With Waldenbooks, Borders and B.Dalton gone, who's left to sell books besides B&N?
That said, I would expect rather than the enormous size of B&N stores, we would see a reduction in size to more stores of the size that Waldenbooks and the like were before. I can't imagine why we would have stores the size of a Sears selling books...not enough to prosper, anyway. But hey, B&N survived and they didn't, so what do I know? I would have thought the opposite - that the mega-size bookstore would die first and the smaller/more efficient ones would survive. |
01-05-2012, 11:32 AM | #11 |
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01-05-2012, 11:36 AM | #12 | |
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Last edited by markbot; 01-05-2012 at 11:38 AM. |
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01-05-2012, 11:49 AM | #13 |
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Walmart, Target, K-Mart, Walgreens, CVS...
The BPHs have built their current business on the twin pillars of high-profile "NYT Bestsellers" and volume discounts. The "bestsellers" don't need bookstores to move. Department stores and drug stores can move them just as effectively. The rest of the catalog, low-volume and "slow-moving" compared to the cash cows, are best suited for online sales. What remains is indeed a specialty, "kiosk"-style business. B. Dalton would be king today if "somebody" hadn't bought them out to kill them. As is, Gamestop could easily fill the void if B&N were to fully implode. (Not that they will. Not yet.) |
01-05-2012, 12:11 PM | #14 |
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It could be B&N is trying to figure out how to simply raise cash to save the core business.
Many of us were surprised that Kobo was sold for $300 million to Japanese e-commerce player Rakuten in November. ALL of B&N is valued at around $1 billion, and that includes 1300+ bricks and mortar consumer and college stores, as well as the Nook business. If Kobo was worth $300 million cash, what is Nook worth, to the right buyer? And could that cash (and some longer-term royalty arrangement on content sales) be the ticket to B&N turning around its retail business finding a profitable long term landing? There is no way to spin this favourably, however: Liberty Media walked away from a $1 billion purchase last summer and settled for a $200 million preferred share investment with an implied price of $17/share. Currently, B&N is trading close to $10 (where it has been up and down over the past 18 months). Last edited by SensualPoet; 01-05-2012 at 12:13 PM. |
01-05-2012, 12:20 PM | #15 | |
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Quote:
The moment Amazon rounded out their line-up with a Kindle Touch -- B&N felt the impact directly. The Kindle with Special Offers pricing probably did the most damage. Kindle was relentless with very simple mass advertising: the Kindle is wonderful and its $79. The moment someone wonders into Best Buy looking for a Nook and it's drastically more than $79 -- never mind it is more capable -- the sales conversation gets muddied, diverted or lost altogether. Last edited by WT Sharpe; 01-05-2012 at 12:58 PM. Reason: Add quote before merging with earlier thread to keep conversations straight. |
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