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: After gaining 24% last Thursday, Barnes & Noble (NYSE:BKS) shares were down as much as 13% today after a new report seemed to kill the rumor that sent the stock soaring, which was that Microsoft (NASDAQ:MSFT) was aiming to buy the entire Nook e-reader division.

So what: The blog TechCrunch had said last week that Microsoft was gearing up to buy the e-reader for $1.7 billion, but today business news site Insider Monkey said, "Nothing imminent is happening," quoting "a highly placed source." Shares of the bookseller bounced off their session low, but still finished down 9.5%. Microsoft shares, meanwhile, gained on the news, finishing up 1%.

Now what: I had suggested last week that the rumor-driven pop in Barnes & Noble's stock was a good time to sell not only because rumors can be dangerous and often never come true but also because the book retailer is essentially just a dusty skeleton without the Nook. If TechCrunch's rumors are true, the value of the Nook would top Barnes & Noble's entire market cap by 36%. In other words, Microsoft could buy the whole company for less than its supposed offer, pending board approval, and shutter the stores. Of course, the cash infusion would be nice if the deal actually went through, but without the Nook there's little to expect from the bookseller's future. Brick-and-mortar book sales are dying, and analysts see significant losses for the company both this year and next. Those are two bright red flags.

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