Interesting article over at Slate: Barnes & Noble knows how to buy and sell stocks By Daniel Gross. Apparently, Barnes and Noble has pulled a lucrative stock switcheroo:
Dumb money always comes in at the top and leaves at the bottom. After a string of poor investments, Bertelsmann in September 2002 decided to abandon das Internet and focus exclusively on books and music. And the Riggios were happy to oblige. In July, Barnes & Noble agreed to buy Bertelsmann’s stake for $2.80 per share, or about $164 million. In the end Bertelsmann lostâ€”and Barnes & Noble madeâ€”45 percent on the transaction. Leonard Riggio said, “We sincerely thank our partners at Bertelsmann for their many contributions to Barnes & Noble.com.” A contributionâ€”not an investmentâ€”is precisely what it turned out to be. The deal closed on Sept. 15.
I have always wondered about online bookstores other than Amazon. I do a lot of shopping at Barnes and Noble stores, I even have one of their reader’s advantage cards, but never shop online with them. It will be interesting to see if this new cash infusion will set them on the road to profitability.