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Barnes & Noble, Inc. Message Board

  • jonathan.loewer jonathan.loewer May 1, 2011 8:29 PM Flag

    Don't Kid Yourselves

    BKS will not be bought out. No tech company will take them, and the Nook/Nook Color will not make this a tech company. There are too many other tablets in the market and coming to the market, such that the Nook is just one of many.

    The bottom line is that BKS was not profitable last year, and they will not be profitable this year. One cannot be exited about this stock in the $10+ price range. After the next quarterly report or two this stock will come down to a much better buy price.

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    • It looks like I was right all along. I knew I would be; I knew that in the long run, everybody that took shots at my point would ultimately be wrong and were totally fooled.

      Nobody would buy this for two major reasons: 1) Leonard Riggio wants a big-money offer and he does not want to give up control and Burkle wants more money than any low-ball buyout would/could offer. 2) Only a low-ball offer would be made on a big/medium-box retailer that can't turn a profit.

      I knew the last few quarters were going to be "fugly" and next quarter will be "fugly" too. It's too bad for the common shareholders that they're stuck with an idiot like Riggio.

    • This is an absolute case of insider trading that SEC should be look into. Look at BKS chart. It bottomed out on 3/18, then exactly 1 month later, on 4/18 started to rally, really, really big upswing over 65% in just over 2 wks for no apparent reason and news. That's also after BKS announced to take themself off the selling block. Then today Liberty Media takeover news comes out. This is how the small retail investor (like us)that shorted BKS getting screwed !!!

    • The problem for Riggio is that if he sells, then he no longer gets to use BKS as his personal piggy bank.

      No more picking up companies on his own dime and then selling them a few years later to BKS at ridiculously inflated prices. How many times have you seen this? He's robbed from shareholders many times pocketing your money.

      It's plain as daylight in all the SEC filings, and for some reason nobody bats an eyelash.

      So, we'll see how this plays out. Will Riggio finally do what's in the best interest of shareholders, or will he once again do what is in his own best interests? If he acts as he always has, then the answer is obvious.

    • Jonathan.loser is quoted as saying; "BKS will not be bought out. No tech company will take them, and the Nook/Nook Color will not make this a tech company. There are too many other tablets in the market and coming to the market, such that the Nook is just one of many."

      If he has the audacity of coming up on this board again, I will say; "Now there is a loser with gonads."

    • "Follow the money", If all you can find in the buyout news is a negative outlook, that means you are losing it on this stock.


    • D'oh !!!!!

    • Hmm - too funny - were you short?

    • They were profitable last year. Hopefully this guy lost all his money.

      • 1 Reply to golden_domer_gomer
      • You said, "They were profitable last year. Hopefully this guy lost all his money."

        Okay, it's time for me to teach you newer investors how to price this stock. Look at BKS's Income Statement; you don't even have to pour through the financials to find this, it's its a hyperlink on BKS's Yahoo! Finance page. Click on the link and scroll all the way down to the bottom where it says "Net Income" and "Net Income Applicable to Common Shares"... You see those numbers in parentheses? Numbers in parentheses are negative in accounting. Also note that those numbers on the income statement are in thousands, so add three more zeros to the end. So here's what we've got quarter-by-quarter:

        May 1, 10
        Jul 31, 10
        Oct 30, 10
        Jan 29,11

        If you subtract the negative earnings from the first 3 quarters from the positive earnings from the last quarter, you realize that this company lost $46.541 million (remember the numbers on the income statement are in thousands, that's why the financial loss is in millions not thousands). Now, if you divide that $46.541Mill by the 57.66 million shares outstanding, you then see that every stock holder lost 81 cents per share (rounding up to the nearest penny).

        Not only were they not--I repeat NOT--profitable, their only profitable quarter came to fruition during the Christmas shopping season. Their quarter ending July 31, 2010 was a bigger negative than their Christmas quarter was positive.

        Their trailing-twelve-months earnings per share is NEGATIVE 81 cents. Don't forget, they've been paying that nice $1.00 per share dividend with their credit card because they had no earnings to pay it with. That is why they didn't cut the dividend, but rather cancel it altogether.

        A P/E ratio is the multiple that is given to a stocks price divided by its earnings per share. Since BKS has been earning negative income for so long we cannot use that metric. But just as a teaching tool lets pretend they'll earn 10 cents. If we divide the $14.00 share price by 10 cents assuming they'll earn 10 cents per share in 2011, BKS would have a P/E ratio of 140, which would mean this stock is way too expensive. Other than young and fast growing companies, P/E ratios should be in the teens or twenties. So BKS should be in the low single digit price range.

        I hope I've shown you something that will help you going forward. There is no reason to wish me ill and hope that I lose all my money, or be bothered by what I am saying. I am not creating lies to bash your stock. I am trying to teach some of you newer investors that might wrongly think that this stock is a buy just by looking at the long-term chart or because the Nook Color looks like a great product. I am actually only trying to help you all, and show you that this is NOT a $14.00 stock based on any realistic valuation, but rather should be trading near all-time lows due to their current financial situation.

    • In the future, those with means will read books, while the unwashed masses will read from electronic tablets.

    • Statement from TDA valuation of BKS:
      "... the Price to Sales and Price to Book ratios are the most appropriate valuation measures. Therefore BKS seems inexpensive with a Price to Sales ratio of 0.0892, below the Retail (Specialty) industry median PS ratio of 0.33, which is supported by a Price to Book of 0.8993 that is also below the industry median of 1.25." Though not bargain basement, it has the momentum and the imagination of the market. With 53% of the float short, we will probably see a nice run toward 20 if the general market holds up. That's not looking too good right now.

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