Borders Is Bankruptcy-Bound, Poll Says
In our poll, 70.9% of voters said a Borders Ch. 11 filing is imminent, while just 29.1% expect the book seller to be able to navigate its current shortcomings out of bankruptcy court.
The overwhelming majority is bearish on the company, even after reports surfaced late last week saying Borders is not seeking bankruptcy protection and is currently working with restructuring advisors to attempt to fix its balance sheet.
The Wall Street Journal reported on Thursday evening that Borders hired restructuring experts Jeffries & Co., as well as FTI Consulting.The market reacted favorably to this news, sending shares up more than 20%. But the stock has been pressured over the past week following warnings from the company. Borders raised red flags late in 2010 when it said that it may have to delay payments to some of its vendors as it attempts to negotiate new loan terms. The company also warned that delaying these payments may result in a violation of the terms of its existing credit agreements in the early part of the year, and that it could experience a liquidity shortfall. There already appears to be backlash from publishers, with the Journal reporting last week that one of Borders' major suppliers is temporarily halting the shipment of books to the retailer. The report cited publisher Rowman & Littlefield Publishing, whose CEO told the Journal that it has stopped shipping to Borders until it has more information on its payment plans. Lenders, including Bank of America (BAC) and General Electric's GE Capital, provided Borders last year with a loan up to $970 million under a revolving credit line. It has another $90 million in loans on top of this from lower-ranking creditors.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV