NEW YORK (TheStreet) - It's no secret Barnes & Noble (BKS), which still draws the bulk of its revenue from the near-extinct retail channel known as bookstores, has struggled to capitalize on new consumer habits and technology. Simply put, the company has failed to build sustainable 21st century profits.
But there's a hitch -- as brick and mortar book sales goes the way of the T. Rex, investors can't agree on whether to call Barnes & Noble a dinosaur or define it as a species that will adapt, with the help of activist investors.
After showing promise in competing against Silicon Valley heavyweights Apple (AAPL) and Amazon (AMZN) with its eBook platform Nook amid a forgettable 2011, Barnes & Noble looks like it has a chance. This has led activists to pile into the company's shares -- this week it was Jana Partners -- with the idea they can help to build an identity that de-emphasizes its bookstores. At the same time, short sellers have gone the other way and bet on failure.
The 12% share stake in Barnes & Noble unveiled by activist investor Jana Partners on Monday underscores that 2012 will be a decisive chapter in the bookseller's history. What's the next page: status quo, asset spins, an outright sale, or even bankruptcy?
|Investors should expect a 2012 page-turner from Barnes & Noble.|
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