Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Barnes & Noble (NYSE: BKS) fell 10% in early trading today before recovering most of their losses.

So what: The company posted a larger-than-expected loss during the fiscal second quarter of $0.22 versus the loss of $0.08 expected by analysts. The company spent heavily to develop the Nook reader, a product the company thinks can be a "massive opportunity."

Now what: As the world transitions away from physical books to e-reader devices, Barnes & Noble is having to contend with the likes of Amazon (Nasdaq: AMZN) and Apple (Nasdaq: AAPL) as formidable competitors. I have my doubts that Barnes & Noble can be more than a niche player in this market despite the strides Nook Color has taken since its launch. The losses in the quarter have done little to persuade me otherwise, so I'm selling the bounce late in the day today.

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