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Barnes & Noble considers selling itself

updated 06:35 pm EDT, Tue August 3, 2010

Barnes and Noble mulls sale to save firm

Barnes & Noble today surprised the industry by revealing that it was contemplating "strategic alternatives" that could involve selling itself. In a statement, the company believed its shares were priced well below expectations and had recruited an independent committee to research its choices to boost the company's fortunes. One option was a takeover by founder and majority stakeholder Leonard Riggio as part of an investor group.

The bookseller was cautious and warned that any deals could be partial or may not happen at all depending on the verdict of the committee.

Barnes and Noble has so far been successful in e-books through the launch of the Nook and reading apps for multiple mobile platforms, but the shift to digital and its overall performance has hurt its physical stores as readers have either flocked to competitors or stayed at home. It has gone so far as to install Apple-like sections to promote the Nook in a bid to offset falling paper book sales.

It has touted ownership of a significant piece of the market, but Amazon has disputed its claims as it believes the Kindle still has a dominant share. Apple is also believed to have encroached on the Nook's territory as customers either want to upgrade to the color, touchscreen iPad or already own it and don't need a dedicated e-paper device. A sale of the company could give it the financial health to increase its scale.

Shares of Barnes & Noble spiked a very large 27 percent in after-hours trading following the word of a possible buyout.



By Electronista Staff
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Comments

  1. facebook_Eduardo

    Via Facebook

    Joined: Aug 2010

    0

    What?

    I don't know if this is sad or good for the company, is this going to have an impact on the consumers?

  1. malax

    Fresh-Faced Recruit

    Joined: Aug 2006

    0

    huh

    I can't make any sense of this. I understand why someone else could look at a company and say "if we bought it, we could run it better and/or sell it for parts and come out ahead." But how can someone say that about their own company? "We don't know how to run our own company; maybe someone else can."

  1. Salty

    Professional Poster

    Joined: Jul 2005

    +1

    Curious

    I've known a few people who have ebook readers, but the fact is I think a LOT of people are still buying paper books. This surprises me a bit. How long have record stores been still selling even if other stores exist? Not to mention ebook readers have been out for what just a couple years? It took a lot longer for the recording industry to start to fall apart.

  1. rtamesis

    Dedicated MacNNer

    Joined: Jan 2000

    +3

    Another Apple opportunity

    Maybe Apple should just buy B&N and fold its ebook offerings into the iBookstore.

  1. cgc

    Professional Poster

    Joined: Mar 2003

    +3

    Oh No!

    Where am I going to go to read magazines and put them back on the shelf without buying them?

  1. PookJP

    Mac Enthusiast

    Joined: Jan 2001

    -2

    Drat!

    Where else am I going to get free access to Lonely Planet?!

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +2

    Re: huh

    But how can someone say that about their own company? "We don't know how to run our own company; maybe someone else can."


    Maybe what they're really saying is "Man, maybe we should sell now, while the selling's good and make some decent money on the deal, rather than try to hold on and end up like Borders!"

    h***, the goal of many a small business owner (esp. in the contracting world) is to get enough business and just big enough that one of the large companies in the same area feel the desire to buy you out. Then it's retirement time!

  1. macnscott

    Fresh-Faced Recruit

    Joined: Sep 2006

    0

    This is not that unheard of...

    "One option was a takeover by founder and majority stakeholder Leonard Riggio as part of an investor group."

    This is not that unheard of in the publicly traded world. If their stock is trading well below its real value, one thing that can happen is to take it back private where the management doesn't have to constantly be worried about what Wallstreet thinks. If they take it private, they can run the company the way they feel is the best way of taking the company forward without taking into consideration all the things that they have to worry about now to look good to the analysts.

    About 3 years ago Cox Communications did the same thing. Their stock was trading well below its real value and the principal share holders decided to take the company back private and bought up all the outstanding shares at the bargain price. Today they are doing extremely well away from the scrutiny of Wallstreet.

  1. ryan_2

    Fresh-Faced Recruit

    Joined: Jul 2010

    0

    Shouldn't have stuck to their core

    Why do some people refuse to see that they are making a bad decision even when it’s staring them right in the face? Especially when deciding to move forward puts others in harms way or destroys their financial stability. Look at this post in regards to Chicago Tribune and Harley Davidson:

    http://bit.ly/bSvPl3

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