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 book retailer Barnes & Noble (NYSE: BKS) soared a dramatic 65% today on news that software gorilla Microsoft (Nasdaq: MSFT) will invest $300 million in its Nook digital-book and college texts businesses.

So what: It's no secret that Barnes & Noble has struggled in the face of increasingly fierce digital competition, but today's massive infusion of capital will go a long way in easing its troubles. The deal finally creates a formidable third player in the e-reader space behind Apple and, and also gives Barnes & Noble the financial muscle to fight off increasingly frustrated activist shareholders in the process.

Now what: Microsoft will now have a 17.6% stake in a new subsidiary for the businesses named "Newco" in a transaction that values them at a whopping $1.7 billion. "Microsoft's investment in [the new subsidiary], and our exciting collaboration to bring world-class digital reading technologies and content to the Windows platform ... will allow us to significantly expand the business," Barnes & Noble CEO William Lynch said. But while there's no doubt that the deal breathes a whole lot of life back into Barnes & Noble, today's staggering surge -- likely perpetuated by frantic short-covering -- already seems to have priced in much of the upside.

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