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Barnes & Noble Shares Rise On Plan To Separate Stores From Nook Media

By | Wednesday June 25, 2014 @ 6:13am PDT

Barnes & Noble Shares Rise On Plan To Separate Stores From Nook MediaThe stock is up 7.3% in pre-market trading after the book retailer said that it plans to split Nook Media into a separate, publicly traded company. The businesses “will have the best chance of optimizing shareholder value if they are capitalized and operated separately,” Barnes & Noble CEO Michael Huesby says. The plan still needs to be approved by regulators, and the company says it could change course if  it can’t raise enough funding or the markets shift. B&N has hired Guggenheim Securities to provide financial advice, and Cravath, Swaine & Moore to handle legal matters.
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Barnes & Noble To Offer Co-Branded Nook With Samsung

By | Thursday June 5, 2014 @ 6:54am PDT

Barnes & NobleThe book retailer’s shares are up 3.4% in early trading after it announced a plan to offer its software in Samsung Galaxy Tab 4 Nook tablets, enabling Barnes & Noble to lessen its exposure to its Nook tablets that have struggled to keep up with rivals including Apple’s iPad and Amazon’s Kindle.  A 7-inch version of the Samsung tablet with Nook will be out in August and sold at Barnes & Noble stores and its website. The chain will continue to offer its Nook GlowLight e-reader. But CEO Michael Huesby says that the collaboration means B&N can “reduce its exposure to the substantial cost structure and other financial commitments” from tablet production and focus on “acquiring and delivering the best digital reading experience to grow Nook content sales.” B&N has agreed to buy 1M of the tablets in the first year after they hit the shelves — possibly going to 15 months if they don’t meet “certain sales thresholds” — it says in an SEC filing.  The companies have a two-year agreement. In addition to the Samsung announcement, Nook has agreed to move from its 208,000-square-foot facility in Palo Alto to a new 88,000-square-foot office in Santa Clara while the Barnes & Noble College digital education employees move to a facility in Mountain View. That will reduce annual occupance expenses by $10M, and future lease commitments by $102M.

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Barnes & Noble’s Stock Price Drops After Chairman Sells 23.5% Of His Shares

By | Thursday April 17, 2014 @ 7:08am PDT

Barnes & NobleThe book retailer’s down 9.4% to $16.85 this morning after Chairman Leonard Riggio disclosed in an SEC filing that he unloaded 3.7M shares yesterday for an average of $17.30 apiece in a privately negotiated block trade. He says that he made the $64M deal “for long-term financial and estate planning purposes.” He still has 20.1% of the company’s stock, about 12.1M shares, making him “the Company’s largest shareholder, a position I feel very good about,” he said in a release. “I love this company and I believe in its future as I do in all of the wonderful people who work here.” It’s easy to understand why he’s so defensive: This is the second major stock sale by a Barnes & Noble insider this month: Earlier John Malone’s Liberty Media unloaded 90% of his stake. He picked up 17% of the company for $204M three years ago when he wanted to buy the retail chain. B&N’s stock price is down 24% over the last 30 days. 

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Barnes & Noble Shares Tumble After Liberty Media Says It Will Sell 90% Of Its Holding

By | Thursday April 3, 2014 @ 7:39am PDT

The stock is down about 12% in early trading after Barnes & Noble disclosed in an SEC filing that John Malone’s media company has agreements to sell 90% of its investment to “qualified institutional buyers.” Barnes & NobleThree years ago Malone offered about $1B to buy the book retailer. When talks stalled, he agreed to pay $200M for a 17% stake. With the sale, Liberty’s ownership in the company drops to about 2%. It also gives up its right to pick two members of the B&N board and to block asset sales. Liberty CEO Greg Maffei will leave when its stock sale closes on April 8. Another Liberty exec, Mark Carleton, was also going to leave but the book retailer’s directors re-elected him.

Liberty says that this isn’t a no-confidence vote: “By reducing our preferred position and eliminating some of our related rights, Barnes & Noble will gain greater flexibility to accomplish their strategic objectives,” Maffei says. B&N Chairman Leonard Riggio echoed that message and added “Liberty’s decision to retain a portion of its investment and have active involvement on our board underscores Liberty’s ongoing commitment to Barnes & Noble.” Read More »

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Barnes & Noble Shares Spike After Investment Firm Proposes Takeover

By | Friday February 21, 2014 @ 10:55am PST

Barnes & NobleThe stock is up 7.5% to about $18 after G Asset Management disclosed that it has offered to pay $22 a share for 51% of the retail book chain — or $5 a share for 51% of the Nook tablet and e-reader business. The investment firm says that its offers are contingent on its ability to obtain financing, due diligence and — in the bid for the whole company – access to its credit facility and cash on the balance sheet. Barnes & Noble confirms that it has received the proposal, but declined to comment. G Asset Management says that in November it made an offer that valued B&N at $20 a share. “In that proposal, GAM suggested that the company should immediately separate the unprofitable Nook segment from the college and retail segment and recommended commencing a rights offering for the Nook segment to existing shareholders,” it says. The firm says it’s still “extremely confident that if the Nook segment is separated from the profitable retail and college business, substantial shareholder value would be created.” B&N is scheduled to talk with analysts on Wednesday about its financial performance at the end of 2013.

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Barnes & Noble Shares Rise On Report Of Nook-Related Layoffs

By | Monday February 10, 2014 @ 10:43am PST

How badly do Barnes & Noble investors want the retailer to ditch its struggling Nook tablet and e-reader business? NOOK logoThe company’s shares shot up 7.6% today, with heavy volume, after Business Insider reported that it laid off the unit’s hardware engineers. The company says that it didn’t fire the entire staff, but acknowledges that jobs have been eliminated across the organization. “We’re not going to comment specifically on those eliminations,” B&N says. “We believe we have a strong management team in place at Nook, having recruited significant new talent. The new Nook management team is focused on managing the business efficiently so that it becomes financially strong while at the same time aggressively moving to drive revenue growth.” Last month B&N reported that Nook revenues – which include digital content, devices and accessories — fell 60.5% to $125M in the nine-week holiday sales period that ended on December 28. Devices and accessories fell 66.7% to $88.7M which the company attributed to “lower unit selling volume and lower average selling prices.” Digital content fell 27.3% to $36.5M “due to lower device unit sales and lower average selling prices.” CEO Michael Huseby notes that B&N had no new tablets this holiday season, a tough comparison with 2012 when it had two. 

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Barnes & Noble’s Sales Fell Over Holiday Season, With Big Declines For Nook

By | Thursday January 9, 2014 @ 9:14am PST

The company’s position appears to be, it could have been worse. Barnes & NobleBarnes & Noble’s bookstores and online service generated revenues of $1.1B in the nine weeks ending December 28, it says today. That’s down 6.6% vs the period last year. But most of the decline is due to store closures. At stores open at least a year,  revenues just fell 0.2% not including Nook tablets and e-readers. “We are pleased with our holiday sales results, especially our core comparable bookstore sales, which were essentially flat and an improvement as compared to the first half of the year,” newly named CEO Michael Huseby says. It’s harder to sugar-coat the story at Nook. Its revenues – which include digital content, devices and accessories — fell 60.5% to $125M. Devices and accessories fell 66.7% to $88.7M which the company attributes to “lower unit selling volume and lower average selling prices.” Digital content fell 27.3% to $36.5M “due to lower device unit sales and lower average selling prices.” Huseby notes that B&N had no new tablets this year, a tough comparison with last year when it had two.  Without new products “we executed our plan to sell through our existing high-quality devices.” The company will have more to say on February 27 when it discloses its fiscal Q3 financials. 

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Cable Veteran Michael Huseby Named Barnes & Noble CEO

By | Wednesday January 8, 2014 @ 9:44am PST

The retailer’s new chief is best known as a numbers guy and a dealmaker — especially in cable where he helped Cablevision spin off MSG and AMC Networks. Barnes & NobleHe also was an exec at Charter Communications and AT&T Broadband, and spent 23 years at Arthur Anderson where he mostly advised cable companies. What’s he doing running the leading book retailer? Remember that John Malone’s Liberty Media owns about 17% of Barnes & Noble. And it’s concerned. Just yesterday Liberty CEO Greg Maffai told an investor conference that it’s a “challenging” time for the chain, noting that while the retail operation is “strong,” the Nook tablet and e-reader operation is “difficult” as it competes with Amazon, Apple, and Google. Shares are up 11.6% over the last 12 months — well below the benchmark Standard & Poor’s 500 which was +26.1%, and down more than 37% from the company’s 12-month high last May. Barnes & Noble has been without a CEO since July when William Lynch stepped down. Huseby was named CEO of Nook Media, and was promoted from CFO to president of Barnes & Noble. Shortly afterward company Chairman Leonard Riggio suspended an effort to take the retail operations private.  “Although a relative newcomer to the retail book business, [Huseby] has quickly developed a comprehensive understanding of the unique opportunities and challenges the Company faces, and he has a Read More »

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Did Barnes And Noble Cook Nook’s Books?

By | Friday December 6, 2013 @ 1:58pm PST

The retailer’s stock closed -12% today after it disclosed in an SEC filing that the agency is investigating two matters involving the company’s recent financial reports.Barnes & Noble On October 16 the SEC’s New York regional office told Barnes and Noble that it’s looking at a company earnings restatement in July. In addition, the SEC is curious about a charge by a “former non-executive employee” that some Information Technology expenses had been ”improperly allocated” between the Nook and Retail segments. “The Company is cooperating with the SEC, including responding to requests for documents,” Barnes and Noble says in the filing. Did the chain lose $117M of its market value today just because of an investigation? Probably not. Many investors have also become pessimistic about the number of Nook tablets and e-readers that Barnes and Noble will sell this holiday season — especially after Amazon CEO Jeff Bezos attracted so much attention on 60 Minutes last week when he disclosed his experiments with delivery drones. “If you’re looking for an excuse” to sell B&N shares, then the SEC investigation “is the perfect one,” says Maxim Group analyst John Tinker.

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Barnes & Noble Posts Wider Q1 Losses, Chairman Suspends Plans To Buy Stores

By | Tuesday August 20, 2013 @ 6:22am PDT

Barnes & NobleBarnes & Noble was down in pre-market trading this morning as it reported fiscal 2014 Q1 earnings. The company posted a drop in revenues of 8.5% to $1.3B for the quarter ended July 27. It also reported a consolidated net loss of $87M, or $1.56 per share, compared to a loss of $39.8M, or $.76 per share, in the prior year. The wider loss was driven by a decline in EBITDA, as well as higher income tax expense, it said. Also, B&N said its chairman, Leonard Riggio, has suspended his efforts to make an offer for the company’s retail business. Riggio said, “While I reserve the right to pursue an offer in the future, I believe it is in the company’s best interests to focus on the business at hand. Right now our priority should be to serve the more than 10 million customers who own NOOK devices, to concentrate on building our retail business, and to accelerate the sale of NOOK products in our stores, and in the marketplace.” On the retail side, which includes stores and BN.com, the bookseller notched $1B in revenues for a 9.9% drop. The company attributed the decline to a comparable store sales decrease of 9.1% for the quarter, store closures and lower online sales, which it said were in line with expectations. In the same period last year, B&N had an especially strong lineup that included the The Hunger Games and Fifty Shades Of Grey trilogies.

The NOOK businesses reported revenues of $153M for the quarter, a decrease of 20.2%. Device and accessories sales were $84M, down 23.1%. Digital content sales hit $69M, shaving off 15.8% compared to a year ago. Read More »

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Barnes & Noble Shares Dip After CEO Shake-Up

By | Monday July 8, 2013 @ 4:41pm PDT

The raft of executive changes at Barnes & Noble announced today include a new CEO for its NOOK e-reader division after company CEO William Lynch resigned — effective immediately. The board of directors tapped Michael Huseby as CEO of NOOK Media LLC and president of Barnes & Noble; Lynch’s title has not been filled, while the NOOK CEO post is newly created. Max Roberts, CEO of Barnes & Noble College, will continue to lead the digital education strategy and report to Huseby. Huseby and Mitchell Klipper, CEO of the Barnes & Noble Retail Group, will report to B&N executive chairman Leonard Riggio. The changes come after the retailer reported disappointing financials for the three months that ended in April, along with an $18.3M charge to account for weak sales of its NOOK tablets and e-readers. That unit lost $108M, or -34%, during the quarter. The company said during the earnings call that it will “significantly reduce losses” in the business by finding partners to help make its color tablets. “We are taking big steps to reduce the losses in the Nook segment, as we move to a partner-centric model in tablets and reduce overhead costs,” Lynch said at the time. Shares of Barnes & Noble finished Monday mostly flat at $17.66, then dropped 4.6% in after-hours trading. Read More »

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Barnes & Noble Shares Fall On Weak Earnings And NOOK Impairment Charge

By | Tuesday June 25, 2013 @ 6:06am PDT

Barnes & NobleThe retailer’s stock price is down about 10% in pre-market trading after it released disappointing financials for the three months that ended in April, along with an $18.3M charge to account for weak sales of its NOOK tablets and e-readers. Barnes & Noble had a net loss of $118.6M in the quarter, vs a $56.9M loss in the period last year, on revenues of $1.28B, -7.4%. The top line was below analyst expectations for $1.33B. The net loss at $2.11 a share — including one-time expenses — contrasts with forecasts for a 99 cent loss. B&N says that it is evaluating some previous financial reports “which may result in a revision” although it doesn’t believe that the amounts will be material. The NOOK business was clearly a sore spot with revenues of $108M, -34%. The company says that it will “significantly reduce losses” in the business by finding partners to help make its color tablets. Revenues for retail book sales fell 10% to $948M due in part to store closures and a drop in online sales — and what it says were tough comparisons to last year which had strong sellers with The Hunger Games and Fifty Shades Of Grey. Read More »

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Barnes & Noble Shares Rise On Speculation About Deals And Changes For The NOOK

By | Monday May 20, 2013 @ 12:26pm PDT

Barnes & NobleThe book retail chain’s shares are up 8.1% in mid-afternoon trading, making it one of the day’s biggest gainers in the media pack. Barron’s appears to be largely responsible for the move after it seized this weekend on reports that Microsoft might be willing to pay $1B for Barnes & Noble‘s NOOK tablet and e-reader platform. “It’s possible Microsoft may bid for Nook or the whole company, and there could also be interest from Liberty [Media]” which already owns 17% of Barnes & Noble, Barron’s says. Deals could send shares up as much as 50% the magazine estimates. The Microsoft rumor took off two weeks ago after Techcrunch cited “internal documents” that confirmed an offer. That sent shares to a 52-week high of $23.71. But enthusiasm fizzled last week when website Insider Monkey reported that a “highly placed source inside Microsoft” said an acquisition “is not happening in the foreseeable future.” That hasn’t put speculation about a big deal to rest. Founder Leonard Riggio has said that he might make an offer for the retail stores, although he hasn’t made it yet. Meanwhile Techcrunch yesterday cited “a source close to the matter” who says that Barnes & Noble is preparing to add a web browser, email, and apps to the Nook Simple Touch e-readers — potentially a big boost in functionality for a $79 device. The company recently … Read More »

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Liberty Media CEO Foresees Cable Mergers But Remains Coy About Charter’s Plans

It’s natural to wonder whether Liberty Media Chairman John Malone’s new acquisition of 27.3% of Charter Communications is merely Step One in a plan to make him a U.S. cable titan — the role he played until 1999 when he sold Tele-Communications Inc to AT&T. And while Liberty CEO Greg Maffei doesn’t predict that, he also didn’t rule it out today in a quarterly earnings call with analysts. He says that cable “could be in for a round of consolidation” at a time when it’s so inexpensive to borrow money and large companies covet opportunities to cut costs — for example by negotiating lower prices from programmers. He cryptically adds that even though Charter can do just fine as a stand-alone entity, “we’ll see” whether it ends up being “a consolidator or condolidatee.” Liberty’s stock purchase agreement gives it the right over time to raise its stake to 40%. Will it do so? “We’ll see what time holds,” Maffei says. Read More »

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Liberty Media Says Revenues And Cash Flow Grew In Q1

Liberty Media is too important a company to ignore. But the Q1 earnings statement out this morning is a jumble after it spun off Starz and formally took control of Sirius XM. It reports net earnings of $8.1B, up from $151M in the quarter last year — almost all of the gains from transactions — on revenues of $789M, up 2,154%. Operating income, a more revealing measure in this case, came in at $160M, up from a $32M loss, while cash flow was +$288M to $271M. Basically the results reflect the generally upbeat Q1 performance of Sirius XM, which reported its results last month. In addition, Liberty says its holdings in Live Nation appreciated 35.2% since the end of 2012 to $668M, while its Barnes & Noble investment was +5% to $275M, and other investments were +7.5% to $887M. CEO Greg Maffei says that Liberty is “extremely pleased with the operating results of our newest subsidiary, Sirius XM, which grew its subscriber base to over 24M.” He adds that following Liberty’s May 1 acquisition of 27.3% in Charter Communications — giving it  four board seats there — “we look forward to working with [CEO] Tom Rutledge, his team, and our fellow board members.”

Related: Liberty Media CEO Foresees Cable Mergers But Remains Coy About Charter’s Plans

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Studios Agree To Offer Movies And TV Shows For NOOK Video

By | Thursday March 7, 2013 @ 9:39am PST

This should help Barnes & Noble a little as it tries to turn its NOOK Video into a viable alternative to iTunes and Amazon for those who want to buy movies and TV shows online. Lionsgate, MGM, Paramount Pictures, Relativity Media, National Geographic, Little Pim, and Film Buff have signed what the companies call “content licensing partnerships” that will “bring thousands of additional movies and TV shows for all ages and interests to the NOOK Video catalog.” Movie titles include The Hunger Games, the Twilight movies, Tyler Perry’s Madea Gets a Job, Skyfall, Rocky, Fargo, Flight, Paranormal Activity 4, Act of Valor, Safe Haven, and House at the End of the Street. TV series in the deal include Mad Men, Border Wars, Great Migrations, and Amazing Planet. “Combined with NOOK’s seamless UltraViolet integration, we are offering customers one of the most dynamic and accessible movie and TV show stores available,” says Jonathan Shar, NOOK’s General Manager, Emerging Digital Content.  

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NOOK Woes Contribute To Barnes & Noble Fiscal Q3 Loss

By | Thursday February 28, 2013 @ 6:44am PST

Barnes & NobleThe book retail chain has a bleak story for Wall Street this morning. It reported a net loss of $6.1M for the three months that ended in January, down from a $52M profit a year ago, on revenues of $2.2B, -8.8%. Revenues missed analyst expectations for $2.4B. And with a dividend on preferred shares thrown in, the company generated a net loss of 18 cents a share — a contrast to the 54 cent profit analysts anticipated. The NOOK results continued to disappoint. It generated $316M in sales in the quarter, down 25.9% from a year ago, with a cash flow (EBITDA) loss of $190.4M, worse than last year’s $82.8M loss. The results include $21M for returns, and $15M in promotional allowances. As a result, Barnes & Noble took a $59M writedown on its NOOK inventory. It says that it is “calibrating its business model and has implemented a cost reduction program that the company projects will significantly reduce NOOK’s expenses.” CEO William Lynch says that the company remains committed to the tablet and e-reader business. In the main retail bookstore business, sales decreased 10.3% to $1.5B although EBITDA increased 7.3% to $212M. Not including NOOK sales, revenues at stores open at least a year were down 2.2%. This week B&N founder Leonard Riggio said he may offer to buy the stores.

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Liberty Media Calls Talk About A Barnes & Noble Sale “Preliminary”

By | Wednesday February 27, 2013 @ 2:52pm PST

Liberty Media CEO Greg Maffei, whose company owns about 17% of Barnes & Noble, doesn’t seem impressed by this week’s disclosure by the book store chain’s founder Leonard Riggio that he may try to buy its retail operation. “It’s very preliminary,” Maffei told analysts today. “We’ll see where Len goes with it.” Maffei speculated that Riggio may have been legally bound by SEC rules to express an interest in buying just to keep the option open. “It was very logical that he would want to be interested,” Maffei says. He adds that he’ll “wait to see what happens” before saying whether Liberty might support or oppose a takeover. Riggio’s disclosure sure looked serious. He said on Monday that his purchase price “would be negotiated with the Board” and its advisers and “is currently contemplated” to include cash and assumption of debt. The company turned the negotiations over to a special board committee and hired outside financial and legal advisers. Maffei doesn’t sound like he wants to sell (which would also be a smart way to help negotiate up the price). Barnes & Noble’s bricks-and-mortar stores have “probably performed better than most outside observers would have thought, and better than we have thought” since 2011 when Liberty first invested. “We’re of the view that there will be retail bookstores around for a long time,” he says. “We really thought of ourselves Read More »

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Barnes & Noble Founder Wants To Buy Its Bookstore Business

By | Monday February 25, 2013 @ 5:15am PST

Barnes & NobleShares are up more than 15% in pre-market trading after Leonard Riggio disclosed in an SEC filing this morning that he plans to make an offer for the retailer’s main business. Barnes & Noble‘s founder, chairman and largest stockholder, with nearly 30% of the voting shares, says he’s interested in the stores and barnesandnoble.com, but not the NOOK Media operation where B&N owns about 78.2% of equity along with Microsoft which has 16.8% and Pearson with 5%. Riggio’s proposal would “facilitate the Company’s evaluation of its previously announced review of strategic options for the separation of its investment in NOOK Media,” he says. The purchase price “would be negotiated with the Board” and its advisers and “is currently contemplated” to include cash and assumption of debt. Riggio would include his equity and take on the debt needed to make the deal. Read More »

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