Are Barnes and Noble's Results a Bad Omen for Ackman?

Barnes and Noble (BKS) release holiday results today and based on what they reports, Bill Ackman must be getting nervous about his 22% stake in Borders (BGP).

Based on holiday sales results and January sales trends to date, Barnes and Noble is reducing its earnings per share guidance to $1.57 to $1.76 and $1.81 to $1.99 for the fourth quarter and full year, respectively. Previous EPS guidance was $1.67 to $1.86 and $1.91 to $2.09, for the fourth quarter and the full-year, respectively. Although the company is reducing guidance based on fourth quarter performance and current trends, full-year guidance remains higher than the guidance provided at the beginning of the fiscal year due to the favorable results achieved during the first three quarters.

The thought process out there was that with all the lead paint recalls, the book sellers would have had a great holiday season as parents sought alternatives to the poison toys out there. It would seem that this did not come to fruition. If the larger and better run operation is reducing guidance, one would be surprised if the "second fiddle" operator did not follow suit.

All this just begs questions from me. I have been trying in vain to figure what Ackman sees in Borders to begin with. That being said, in the last 5 days he has taken out "total return swaps" in Borders over 2 million shares. What does he know?

Much has been said about Ackman being a "slick salesman" and that may be true. It is also true that he is a very good investor and no dummy. There has to be an upside I just cannot see.

Anyone?
Disclosure: None