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Barnes & Noble Shares Tank As Major Investor Sells Stake

by Todd Haselton | April 3, 2014April 3, 2014 9:00 am PST

Barnes & Noble store

Shares of Barnes & Noble are currently trading down about 11.9 percent on news that Liberty Media is planning to sell off 90 percent of its stake in the company. Liberty Media acquired a 17 percent stake in Barnes & Noble back in August, 2011 for $200 million. When a major investor backs out of a company, it’s usually a sign that there’s a huge lack of confidence in strategy and the company’s future. Liberty said that’s not the case, though.

“By reducing our preferred position and eliminating some of our related rights, Barnes & Noble will gain greater flexibility to accomplish their strategic objectives,” CEO Greg Maffei said Thursday. The company’s chairman also pointed to the firm’s decision to hold on to 10 percent of its original investment as its “ongoing commitment to Barnes & Noble.” Liberty Media may also just be taking profits — shares of Barnes & Noble were trading around $10-$11 in April, 2011, about half the price it trades at today.

Even still, Barnes & Noble has continued to struggle in the face of Amazon, which has grown from a bookseller into a e-tailer and multimedia empire. The company’s Nook business has continued to sink, too, with revenues down 50-percent year-on-year in Q3 — meanwhile, Amazon has continued to expand into new offerings, most recently with its own set-top TV box called the Fire TV. Liberty Media must fear how Barnes & Noble can continue to fight.

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Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...