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Barnes & Noble Buys Back Nook Stake From Pearson

30 December 2014

From The New York Times:

Barnes & Noble said on Tuesday that it had reached an agreementto buy back Pearson’s stake in the booksellers’s struggling e-book business, Nook Media, for nearly $28 million.

The company said that it would pay $13.75 million in cash and 602,927 shares of Barnes & Noble’s common stock. The move follows an exit by Microsoft from Nook earlier this month. Barnes & Noble bought out the software giant’s stake for about $120 million.

. . . .

 The company is planning to split into companies, one with Nook and its college bookstores and another consisting of the retail stores and website, by the end of August.

Link to the rest at The New York Times

Bookstores, Nook

11 Comments to “Barnes & Noble Buys Back Nook Stake From Pearson”

  1. Will the half with the retail store and website keep the ebooks on its website? Surely Nook Media and the college stores half will have a website of its own. Or will it? I’m wondering how all this will shake out. And where the Nook ebooks will land.

  2. It would be great to see Nook get up on running on its own.

    The graph that PG cut seems to contain the bad news:

    Barnes & Noble said in a statement on Tuesday that the transaction would strengthen its balance sheet ” and further simplify the corporate structure by giving the company ownership (through its subsidiaries) of 100 percent of Nook Media.”

    Balanced finances and simplification of their corporate structure, while laudable, aren’t going to be the things that make Nook a genuine competitor to Kindle.

    It would be good to hear that there’s some vision and aggression in there somewhere.

    • “Balanced finances and simplification of their corporate structure, while laudable, aren’t going to be the things that make Nook a genuine competitor to Kindle.”

      It might help, though, if they’ve been running Nook by committee. Take away all of the excess players, find smart, innovative people to run that division, and give them full go-ahead to make the necessary changes.

      I might be too optimistic, but I still think Nook can make it if they just get their act together soon. All this news of restructuring makes me think that they are either trying to do that, or getting ready to sell to someone who will.

      • Perhaps the problem with them not finding the right “smart, innovative people” is that too many corporations view IT as a money-sink, providing no value when rather, their value is hidden in preventing problems more often than not and, as in the case of any online commerce, they are absolutely necessary as the most valuable of all employees, because they write the scripts that allow the digital marketplace to function. Without the IT gurus, all companies in this day and age would fail, but you can’t tell that to the suits at the top.

        • I used to work in the computer industry. Aside from doing stats, I designed and tested the Man-Machine Interface (MMI).

          When tech is done right, it is transparent to the user.

          You don’t get a lot of ‘attaboys’ when you are invisible. But you sure get a lot of ‘you dumb bystyrds’ when you are not.
          +++++
          I do not have a Nook. Have heard good things about the device. Have heard nothing but ‘you dumb bystyrds’ about the B&N online storefront. That’s fixable. But it will take a tough sumbytch to fix it. I doubt there is one tough sumbytch in all of B&N.

          Why?

          If you are a tough sumbytch you have a choice: B&N or Amazon. Which would you choose?

          • I only know this because my hubby is IT–application developer–and tells me stories about how they have been considered “non-value-added” by the company. I also know from my own experience as the technical support person in a small office that no one thinks of IT until things go wrong and then it’s IT’s fault, as if they downloaded malware or moved files on the server.

            I agree with you that there is probably not a “tough sumbytch in all of B&N” to fix what’s wrong.

            • Sony is a great example right now. They are finding out that IT processes and procedures are really really important. Those poor suckers have no idea the size of the pile of s— that they’ve just fallen in. They are going to be sued until the cows come home and then some.

    • It would be worthwhile to do the math.

      The $120 million for Microsoft’s 16.8% works out to a value of $714 million, while Pearson’s 5% for $28 million equals about $560 million.

      Either Pearson just wanted out or they wanted to retain the potentially more valuable B&N stock (which was more than half the amount).

      And, if we looked a bit further into it. Pearson paid about $89 million for that 5% stake. They took a $60 million loss on the deal. Microsoft took a $180 million loss, but that was less than the rate that Pearson lost.

      The original value of the Pearson and Microsoft investments put Nook’s value at about $1.5 billion. This change leaves Nook’s value somewhere between half and a third of what it once was. Given their experience in the market (and the many notable troubles they have had), that may not be too bad.

      Just as a comparison, I looked up Kobo Media. At the moment, they are at ¥5,571 Mil (about $46 million).

      • What’s Kobo Media?

        That’s not the ebook company. Kobo is a wholly owned subsidiary of Rakuten and isn’t public traded.

        • That is most likely a misidentification on my part. It appears if you search for Kobo’s market value.

          You are correct that Rakuten doesn’t appear to break out revenues for the pieces of their various divisions.

  3. Getting rid of people is a wonderful way to discover what didn’t really need to be done.

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