David Hernandez
Long/short equity, medium-term horizon, growth at reasonable price, ETF investing

Barnes & Noble's Split Doesn't Fix Underlying Problem

Split Coming Soon

Barnes & Noble (NYSE:BKS) has decided to split into two seperate companies. They are spinning off their Nook and College segments into one company. The other company will consist of their brick and mortar Retail segment and bn.com. Management believes the split will unlock shareholder value. Yet, Barnes & Noble is facing significant problems in every operating segment.

The Nook Problem

The Nook division has been bleeding money for years. Nook has produced an operating loss over $1.2 billion in the last 4 years.

Nook 2011 2012 2013 2014
Revenue $695,182 $933,471 $780,433 $505,862
Operating Profit $(229,689) $(286,343) $(511,848) $(260,406)

Barnes & Noble has one of the largest eBook libraries. Yet, they are having...

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