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TheStreet Open House

Barnes & Noble -- A Premature Celebration

NEW YORK ( TheStreet) -- With Microsoft's (MSFT) $300 investment, Barnes & Noble (BKS) has gone from acutely troubled to sitting pretty, at least according to many in the media.

Motley Fool, for example, simply stood and cheered: "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 Amazon.com, and also gives Barnes & Noble the financial muscle to fight off increasingly frustrated activist shareholders in the process."

Motley Fool, for example, simply stood and cheered: "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 (AAPL) and Amazon (AMZN), and also gives Barnes & Noble the financial muscle to fight off increasingly frustrated activist shareholders in the process."

Motley Fool purports to have answer. Their headline read: "Why Barnes & Noble Shares Skyrocketed." But Barron's knows that when a company's basic business -- retail bookstores -- is so congenitally troubled, there are, even in the face of Microsoft's involvement, more questions. Barron's ran this headline: "Can Microsoft Help Barnes & Noble Start a New Chapter?" With apologies to the media who merely stood and cheered, the answer is, all weighed, a resounding 'probably not.'

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.

For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.

Fuchs appreciates your feedback; click here to send him an email.

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