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Peter Larson  

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  • Barnes & Noble Revenue Down, Nook Deal With Microsoft Ends, Investors Flee [View article]
    They've been reticent to say what they will do with cash flow now.

    For one thing, they may be obligated to buy out Pearson Nook shares under terms matching Microsoft's over the next 15 days.

    After that, they will probably hold on to any cash until after the spinoff, to ensure both Nook and Barnes and Noble have sufficient balance sheets to keep all interested parties and debtholders satisfied at the time of the spinoff.

    They may do a dividend and/or buyback in conjuction with the spinoff. That's a Liberty favorite.
    Dec 5, 2014. 04:41 PM | Likes Like |Link to Comment
  • Barnes & Noble's Nook Has No Niche [View article]
    "The chorus of nay-sayers probably scared many investors out of BKS shares at the worst possible time."

    Ah but WallStreet,

    When other investors are scared off, that is an opportunity for us, no?

    Most of the money I have made in BKS, I have made by understanding that Riggio orchestrates PR for the benefit of his own portfolio. Perhaps unintentionally at times, but he is more than happy to let the stock drop on unclarified misperceptions so that he can buy more at a lower price.

    Case in point: Microsoft's $238 million loss on the Nook unit is Barnes and Noble's $238 million gain.
    Dec 5, 2014. 12:40 PM | Likes Like |Link to Comment
  • Barnes & Noble's Nook Has No Niche [View article]
    Evan,

    This is an immature reaction to a snide, but accurate comment.

    I've written multiple articles on this stock at SA, and when I (and others) do we put a lot of effort into understanding the ins and outs of the business. As well as coming up with unique and (hopefully) meaningful insights into the company strategy.

    Your article went on for quite long, and did not contain much more than verbose opinions on general knowledge, and in some cases inaccurate knowledge.

    For example, you stated that the Nook would not be carried in the Barnes and Noble stores. Management has not stated that or even implied that. They have on multiple occasions that there would continue to be a strong working relationship between nook and retail under any scenario.

    But more troubling is that you have replied to Debunker, using 321 words, rather defensively and still without adding anything new. This is frustrating for our readers and I would ask that you not do so. And I would certainly ask that you not tell them to click on articles (since the next article might be mine ;)

    Thank You,
    Peter Larson

    PS: I am generally bullish, and you are bearish. That is fine. This isn't about that, this is about the tone of your reply.
    Dec 5, 2014. 12:35 PM | Likes Like |Link to Comment
  • Liberty Media Sale Creates Decent Buying Opportunity In Barnes & Noble [View article]
    ... coupled with higher margins, lower expenses, and greater workforce efficiency. Which combined gave the brick-and-mortar stores near record profits last year, in spite of declining sales.

    In 2007, I would have agreed with you. Ebooks sounded theoretically terrible for bookstores. But that was a looooooong time ago.

    Back in 2012-2013, Kindles cost less than $100, Amazon prime was $80, Amazon free shipping was set at $25, and you had to literally push your way past a Nook salesman to spend money at Barnes and Noble. AND FOR SOME REASON PEOPLE DID IT. Maybe not as many as in the past, but clearly enough.

    Now, prices for both Prime and free shipping are going up on Amazon, the self-cannibalization from Nook is going away, and the latest Kindle is a set-top box rather than an ereader.

    Why would the ebook skeptics give in now?
    Apr 18, 2014. 04:53 PM | Likes Like |Link to Comment
  • Liberty Media Sale Creates Decent Buying Opportunity In Barnes & Noble [View article]
    I think you're absolutely right on that one.

    I don't mean to imply that insider sales are bullish- I think they are generally bearish.

    But nuance matters. Barnes and Noble has been, by far, my top performing position over the last three years. Not because it went up all the time, but because it was relatively easy to predict.

    The market dropped 11% on the news, and I think that's an over reaction in the short to medium term. Riggio can't time his sales precisely. What he can do, is manage the entire company and PR to suit his own investment needs.

    Riggio is 73 years old. His brother is no longer CEO and his children are not affiliated with the company. He's effectively retiring.

    I have mentioned in previous articles that the potential for a buyout gave Riggio a perverse incentive to -lower- the stock price so that he could place the lowest bid possible. This was a profitable insight for me, and the fact that Riggio has apparently abandoned those plans removes the perverse incentive. Now that he is thinking like a retiree, he has an incentive to take fewer risks.

    At this point, I'm not looking for BKS to skyrocket. But falling apart isn't all that likely either.
    Apr 18, 2014. 04:17 PM | Likes Like |Link to Comment
  • Liberty Media Sale Creates Decent Buying Opportunity In Barnes & Noble [View article]
    "Can you even find a film camera other than a niche market one?"

    And that's the critical difference between film (and DVDs, and CDs, and ebooks) and books.

    How does a book go obsolete? As long as you have eyeballs and are literate it remains an option.
    Apr 18, 2014. 10:20 AM | Likes Like |Link to Comment
  • Liberty Media Sale Creates Decent Buying Opportunity In Barnes & Noble [View article]
    If he knew something, it would be illegal for him to sell.
    Apr 18, 2014. 09:27 AM | Likes Like |Link to Comment
  • Liberty Media Sale Creates Decent Buying Opportunity In Barnes & Noble [View article]
    "Books will soon be obsolete in the public schools."
    Thomas Edison, 1913.

    "Some believe the paperless office is not that far off... the use of paper for records and correspondence should be declining by 1980"
    Businessweek, 1975.

    "Print is dead"
    Egan, Ghostbusters, 1984.

    All smart people. All dead wrong.

    Maybe you'll have more luck with your baseless prediction?
    Apr 8, 2014. 10:27 PM | 2 Likes Like |Link to Comment
  • Barnes & Noble - A Bargain Hiding In Plain Sight? [View article]
    Long BKS, but very skeptical of the deal.

    Len Riggio, Liberty Media, and Microsoft own more than the lion's share of Barnes and Noble/ Nook Media.

    Unless one of those three groups is in on the deal it is likely more of a PR stunt by the offer-maker, and unlikely to be taken seriously.

    But here's the story people are missing: Amazon's prime and free shipping price hikes directly benefit Barnes and Noble. The BN member program is NOT going up in price and neither is the $25 free shipping minimum at BN.com.

    They can get away with it because they don't need to extend the offer to 25 pound bags of sand for $15, for example.
    Feb 22, 2014. 01:26 PM | 1 Like Like |Link to Comment
  • Barnes & Noble - A Bargain Hiding In Plain Sight? [View article]
    That I don't know- a copy of the annual report, perhaps?

    It sounds goofy, but Maffei may just want a better sense of how information is communicated to common investors.

    A lot of what Liberty does involves improving financial presentation, in cases where the actual finance were never really that bad.
    Dec 27, 2013. 05:56 AM | Likes Like |Link to Comment
  • Barnes & Noble - A Bargain Hiding In Plain Sight? [View article]
    To qualify as a common shareholder.

    Liberty media's existing ownership is through preferred shares exclusively.
    Dec 26, 2013. 12:24 PM | Likes Like |Link to Comment
  • Barnes & Noble - A Bargain Hiding In Plain Sight? [View article]
    I don't think I can be mistaken for a Barnes and Noble bear at this point, but for what it's worth- I've recently sold off my stake.

    Mainly, I'm just mirroring Riggio's insider sales at $13.8. A couple of years ago, Riggio was rumored to want to buy the company out at $18, and that has been my trading benchmark. $13-$14 is the new "normal".

    But there's another new problem as well- the SEC investigation.

    The sum-of-the parts valuation (and indeed, the companies solvency) is dependent on the fact that the retail segment is still churning out significant profits. The problem is, one of the things that the SEC is investigating is the breakdown of expenses between Nook and retail.

    The SEC is specifically investigating IT expenses, but it is possible the SEC will disagree with the margin split on intercompany nook sales. Since Barnes and Noble stores sell nook devices, the revenue is reported twice and eliminated by a line item, I had assumed that this line item simply represented the full price of Nooks sold in stores, but it is possible that the company is allowing the retail segment to claim unrealistically high theoretical gross margins as the nook distributor. This would make the retail segment appear profitable by exaggerating the nook unit losses.

    It could also work the other way around- the company could have UNDERstated the profitability of retail by misallocating nook-related expenditure and margin. And I think that's more likely, since the company has been looking to spin off the nook unit. If this is the case then it is technically good news for shareholders as Nook losses are only partially owned by the company.

    But, I'm not in a position to say for sure what's going on with the accounting.

    What I can say for sure, is that the upcoming holiday sales report will probably look ugly.

    Barnes and Noble has historically released an 8-K that contains just sales for the holiday period. The full quarterly report -which reports income and cash flow- comes out a month later. Since we're cycling a holiday period containing multiple tablet launches against one with just an ereader launch, it's a safe bet *sales* declined.

    So I'm out at least until then. If the stock drops after that report I'll look to buy back in, because I'm pretty sure the company will turn a bottom line profit this quarter (read my "give a nook a cookie jar" article to know why).
    Dec 19, 2013. 04:02 PM | 1 Like Like |Link to Comment
  • The Barnes & Noble Nook Is Cooked: It's Time To Short [View article]
    I can see where you're coming from-

    Barnes and Noble's retail division has been consistently reporting record high profits. And the third quarter profits were the largest ever, due to fewer negative margin hardware sales.

    But these are reasons to be bullish, not bearish.

    As far as the Nook- I think's it best to recognize that this is a format war and analyze accordingly.

    Nook's epub format has clearly become the industry standard. Worldwide, it is also the most common ebook format (Amazon alone has majority share in the US, but they are weaker internationally). And due to Barnes and Noble's market share, partnership with Microsoft, and Adobe DRM they are clearly the gorilla of that format. The epub standards board even allows Barnes and Noble to edit the official epubcheck code.

    This gives Barnes and Noble a competitive advantage over Amazon, because they don't need to worry about market share. If someone in Norway buys a Kobo or Sony ereader this year, or they just start buying Google ebooks, they can easily switch to a Nook later on. They can't easily switch to a Kindle.

    Both ereader and ebook sales are negative margin right now. Nook can sit the quarter out, Amazon can't. And when margins turn positive, Nook can come back. Amazon may not be able to.
    Dec 5, 2013. 10:54 AM | Likes Like |Link to Comment
  • Buy Barnes & Noble At A Deep Discount [View article]
    Why not link to the source?

    http://bit.ly/16l40kS
    Oct 20, 2013. 05:28 PM | 1 Like Like |Link to Comment
  • Buy Barnes & Noble At A Deep Discount [View article]
    Hmmm...

    Total minimum rent obligations for 2014 are only $413.8 million.

    They have 674 locations, with an average square footage of 26,000 square feet.

    Which gives an average cost per square foot of around $12. That's below average, as near as I can tell, but I'm not sure that they are allowed to sublease and some of the leases have percentage sales obligations.

    So, I wouldn't say that there's any explicit value in the real estate portfolio. But it isn't an albatross- if physical book sales decline they could sell generic widgets and make a profit.

    Oct 17, 2013. 03:47 PM | Likes Like |Link to Comment
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