Liberty Media and Barnes & Noble Part Ways

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

In August 2011, Barnes & Noble (NYSE: BKS  ) was in a rough spot. The company's stock was below $10 after having almost touched $50 in 2006. Enter Liberty Media (NASDAQ: LMCA  ) and Chairman John Malone. The leadership at Liberty thought the bookseller's Nook had huge potential as a tablet, reader, and software platform for other devices.

Those dreams turned into brutal reality over the next two-and-a-half years, and last week Liberty sold off most of its shares in Barnes & Noble.

Liberty backs away from Barnes & Noble
While Liberty will keep roughly 10% of its original stake in the bookseller, the majority of its position has been sold to qualified institutional buyers. That means Liberty won't have the authority to appoint members to the board, although one of its members will stay on after being recently reelected. Liberty CEO Greg Maffei said in the press release that the company looks forward to "maintaining its relationship with [Barnes & Noble]." 

The obvious shortfall for this relationship is in the Nook's performance. Sales have been down, staff has been cut, and the path forward has been shrouded in shadows and mist. Barnes & Noble has largely remained committed to the platform and has announced a new Nook coming in fiscal 2015, but the grandest of hopes ran into the brick wall that is the tablet marketplace.

Nook's image issues
After a strong start, the Nook has fallen behind Amazon's Kindle line and Apple's iPad in market share. The Nook seems to be suffering from its success as an e-reader brand. That's left it behind in the tablet race, where Amazon and Apple have made themselves out to be the do-all, be-all device manufacturers.

Liberty's vision for the Nook was bigger than just being another brick in the wall. In early discussions, Malone thought the Nook would succeed on QVC, help lead Barnes & Noble's digital revolution, and break into the tablet market with ease. For the past year, it's been clear that none of those things were going to happen, and it's been only a matter of time until Liberty bowed out.

Barnes & Noble will still have a small relationship with Liberty, as the media company is holding on to 1.7% of the bookseller. The lack of a Liberty seal of approval has already spelled bad news for Barnes & Noble investors, though, and the company's stock fell sharply on the news. While it may not change the immediate future of the business, there was a lot to be said for having Liberty's backing. It's not clear who Barnes & Noble can turn to for backing now.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2907097, ~/Articles/ArticleHandler.aspx, 8/28/2015 10:52:17 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Andrew Marder

Andrew Marder worked in retail for years, holding jobs ranging from bookseller to bank strategy analyst. He has worked for the Motley Fool since 2012, and loves coffee.

Today's Market

updated Moments ago Sponsored by:
DOW 16,613.15 -41.62 -0.25%
S&P 500 1,982.47 -5.19 -0.26%
NASD 4,809.44 -3.27 -0.07%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 10:36 AM
BKS $15.61 Down -0.08 -0.51%
Barnes & Noble CAPS Rating: *
LMCA $37.22 Up +0.10 +0.27%
Liberty Media CAPS Rating: ****