John Malone Cuts Barnes and Noble (BKS) Stake, Shares Plunge

Barnes & Noble

Shares of Barnes and Noble (BKS) are down nearly 14% after one of the company’s biggest investors slashed its stake. Liberty Media (LMCA), the conglomerate run by billionaire investor John Malone, announced on Thursday it was selling 90% of its 17% stake in the struggling bookstore retailer, ending a nearly three-year $204 million bet that the company would emerge as a dominant seller of e-books.

In 2011 Malone offered to buy Barnes & Noble for $17 a share, or about $1 billion, to tap into the growing e-reader business through its Nook unit, but instead made the investment.

Malone’s share dumping comes as the bookseller’s Nook e-reader tablet continues to struggle in competing with the likes of Amazon’s (AMZN) Kindle and Apple’s (AAPL) iPad. Barnes & Noble said sales of its Nook e-reader fell 50% in Q3.

Liberty Media said it was selling a majority of its preferred shares to institutional investors with the sale expected to close April 8.

Gregg Maffei, Liberty’s chief executive and a respected dealmaker, will resign from Barnes & Noble’s board as of April 8, when the sale becomes final. Additionally, as a result of Liberty’s reduced ownership, they will no longer have the right to elect two preferred stock directors to Barnes & Noble’s Board, according to a joint statement.

BKS fell as much as 14.6 percent, and was last up 12 cents, or 0.63 percent, to $19.24 at 5:12PM in New York today.

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