B&N Shares Rise As News Of Spin-off Surface – (BKS)

Barnes & Noble

Barnes & Noble (BKS) shares gained almost 6% today, following an unconfirmed report from dealReporter saying that the nation’s largest book chain is expected to spin-off its Nook tablet business.

Shares of B&N have bled 13 percent over the course of the past week, when Liberty Media (LMCA), the conglomerate run by billionaire investor John Malone announced it was selling 90% of its 17% stake to “qualified institutional buyers.”

This isn’t the first time the bookseller announced a potential spin-off of its Nook e-reader unit, which continues to drag down the bottom line for B&N, leading to disappointing quarterly reports for the firm. Back in 2012, the retailer stated that it was reviewing plans to separate Nook from the other Barnes & Noble operations so it could continue to scale the business.

If dealReporter’s report turns out to be a non-rumour, then the announcement would essentially be Barnes & Noble’s white flag, signaling that Nook, whose sales nosedived by 60% for the 2013 holiday season compared to the previous year, cannot compete in a market dominated by tech giant Apple (AAPL), e-retailer Amazon.com (AMZN) and smartphone manufacturer Samsung.

Barnes & Noble gained $1.05, or 5.77%, to $19.24 at the close in New York today.

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