Liberty Media Corp. says it is cutting its stake in Barnes & Noble Corp., sending the bookseller's shares down sharply.

The investment company controlled by billionaire investor John Malone gave Barnes & Noble, the largest specialty bookstore chain, a life line in 2011 when it bought a 17% stake in the company.

But now Liberty says it is selling the majority of its shares to institutional buyers. It will keep 10% of its original investment and lose its two board seats.

Barnes & Noble Chairman Leonard Riggio says the reduced stake gives his company more flexibility to pursue strategic options.

Shares were down close to 10% as of 10 a.m. The stock had been up 48% this year.

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