dingojoe

Why Is Bill Ackman Siding with Borders Group?

I don't think you have a very good grip on the facts here. Pershing holds about 11 million shares of BGP. They also have 14.7 million warrants at a price of $7.00/share. If they executed those warrants (and the odds of that seem pretty slim) they would then own about 31% of BGP as warrants are dilutive.

Pershing has also loaned BGP 42.5 million dollars last year that was initially due Jan 15th (today) and now has been extended to Feb 16th. Pershing obviously has been far more entangled with with BGP for some time now and in fact Ackman's investment in BKS may have been an attempt to influence BKS into buying out BGP. The Riggio brothers didn't bite and Ackman sold out of BKS, or perhaps, alternatively, Ackman needs the money and BKS could be sold for cash while BGP could only be sold for pennies.

Not sure why Ackman got into the book business in the first place since his involvement in retail stocks seems to be heavily focused on real estate plays. His ownership of SHLD (which he tired of) his TGT holding (which he pitch a real estate scheme to, which TGT has ignored) and his recent inexplicably foray into GGP (which he seems to think will provide equity to shareholders in BK because of the real estate) . Even his short term play on Longs Drugstore placed heavy emphasis on the CRE value. The bookstore play just doesn't fit into that. Maybe Ackman just likes to read.

Barnes & Noble: Pussyfooting Around Leases

A "leaked" letter by Len Riggio was actually in the WSJ a few days before the earnings report and it said the retail environment was awful but B&N felt it could control costs and had no intention of cutting the dividend. Take it for what it's worth.

I saw that dividend number too, that plus the fact that Borders is on it's deathbed certainly maked BKS look like a nice opportunity, though it has bounced quite a bit off of it's low in the last few days.

Did Borders.com Results Lead to Barnes & Noble Chief's Exit?

I hope analyst do ask lots of questions, but BGP isn't very high profile and the questions asked last conference call weren't very probing, so don't hold your breath.

It's my understanding that the Borders website is now being used in store by employees to order books for the customer when the book is not in stock in the store (whereas previously it was done from the traditional in-store system). Furthermore, given that the new Borders business model involves fewer titles in-store that means greater reliance on whatever system of special ordering they are using. So, the question are, how much of the internet usage/ordering is store driven? and how much of it is replacing lost sales at the store level due to the decrease of titles carried in store?

I actually would have expected the conversion rate to be higher if Borders is utilizing the system in store to order for customers, but the rollout of the system to stores may have been staggered, so that may explain the big one month jump and why the conversion rate isn't higher.

Still don't like BGP or Sears/Kmart for that matter as they are all the poorest retailer in their respective segments. SHLD may have value once liquidated, but I just don't see any rabbitt for Borders to pull out of it's hat.

Pershing Releases 13-F: Bulking Up on Sears, No Longer Short Ambac

Still think his Borders-B&N holdings are the most interesting. Does he really think he can maximize both investments, or does he think vulturizing one (BGP) can provide benefit to the other (BKS) that outweighs any stock loss on BGP.