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Barnes & Noble, Inc. Message Board

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  • schneckden schneckden Feb 5, 2013 9:31 AM Flag

    Any word on when MSFT starts paying BKS $85mn / year?

    So this Windows 8 app should now entitle BKS to receive $60 million a year for 3 years if i recall? This should hit the income statement and boost BKS margins. I think its just goofy that the Pearson and MSFT investments are sitting in the liability section of BKS's balance sheet. These are investments, not liabilities. BKS put them as liabilities b/c the investments have 5 year put options exercisable by MSFT and Pearson if BKS doesn't spin off the NOOK business. Obviously BKS is going to spin it off. If anything, BKS is extremely incentivized to spin off NOOK sooner than later as BKS locked in this 1.7 billion valuation with MSFT and Pearson. If the IPO price values BKS less than 1.7 billion, MSFT and Pearson have to be made whole through larger % interests. It wouldn't surprise me if BKS lays out the IPO of NOOK on the next earnings release as everyone expects them to report #$%$ numbers (I don't, as they suggested the retail stores are performing ok) and gives investors something to cheer about!

    Sentiment: Strong Buy

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