Barnes & Noble’s stock sank steeply this morning after it warned investors that red ink is flowing. The company’s share price plummeted 24% in morning trading.
Now Barnes & Noble is looking at separating its Nook business, creating a new company around its electronic books and ereaders. However, B&N also noted that a “shortfall in the expected sales of Nook Simple Touch” was a driving factor in the company’s losses, so is Nook any more of an appealing business to investors?
The company’s brick-and-mortar book sales have been hammered by agile online competitors like Amazon, while cheap, full-featured tablets such as the Kindle Fore have put tremendous pressure on the Nook. Critics argue that Barnes & Noble simply can’t compete with the likes of Apple and Amazon, although chief executive William Lynch called such claims “ridiculous.”
Over at Indigo Books & Music, which owns the Chapters line of bookstores, selling Toronto-born Kobo created a $300 million windfall and a spike in the stock price. While it’s not clear whether this will save the also-struggling company, it’s an option B&N may want to consider—assuming they can find a buyer.