Stifel Nicolaus believe the company could perform better than management is suggesting and could be a PE target. Strictly speaking an MBO with management currently owning 20+% of the stock. Schecks' target price for the BN stock is in the low to mid $40's. After a dip early in the week, the stock is trading today at just under $38.00 and has a market cap of $2.5billion.
With the over-bearing requirements of financial reporting - evidenced by an on-going investigation at BN - the Riggio's may decide to bail out and indeed go private. While there are peaks and valleys in book retail, BN has been able to remain fairly consistent in delivering top line growth, strong operations and resulting good net income. Additionally, the capital requirements for this business wouldn't be onerous and as such it would make a safe place to put PE dollars for a decent return. Certainly one to keep watch of.
BN Press Release
On a less realistic note, George Gutowski on SeekingAlpha suggests that Jeff Bezos get out his check book and buy BN to consolidate the industry. He makes some interesting claims:
- Barnes & Noble has announced that its best customers are its worst financial problem. Most other industries make the most profit on their best customers, but not in this case.
- The book industry has not been able to sell itself other than through price competition. They all seem to offer the same book by the same author as their competitor (either retail or internet) and therefore have not been able to develop additional value added propositions.
- Acquisition allows the combination of best of breed in both the internet and retail categories. Barnes & Noble can entirely close down poorly performing internet distribution.