Barnes & Noble at $38. Really?

NEW YORK (TheStreet) -- Shares in Barnes & Noble (BKS) have been rising recently after a Barron's report saying that the company's share price will more than double over the next year. The Barron's report, "Beware a Low Bid for Barnes & Noble," was published March 2, 2013, and gives the company a price target of $38 -- quite an increase from $16.33 this morning.

To put that number in perspective, the book seller was under $14 a share toward the end of February and trading at just $15.63 when the markets closed on Friday, March 1. As of the close of trading that next Monday, shares stood at $16.46, marking an increase of roughly 5% over a couple of days. This from a company whose one-year price target currently averages $18.40.

Investors seem pleased by the idea of Leonard Riggio, the book seller's founder, chairman and leading shareholder, buying the retail arm of the company. So, why the enthusiasm?

At $16.35 a share (closing price on March 18), the retailer is valued at $965.99 million or about half of Nook Media's $1.8 billion valuation from investors a year ago. What Riggio would pay for the retail side is unclear. Estimates are anywhere from $500 million to twice that amount, says the New York Times.

Barron's attributed the stock price increase, from under $14 in late February to almost $16 when the company published its report, to the disclosure of Riggio's interest in bidding for the retail operation.

"The retail outlets alone could be worth $19 a share or more, meaning that investors are paying nothing for the now-unprofitable but strategically valuable Nook," writes Barron's.

OK. Sure. The Nook is likely worth more than zero and the product has been self-financing. Further, the company is currently eyeing the Nook as a vehicle for digital textbooks, which could be a real boon should the device catch on, but that is a pretty big "if."

The Nook just isn't that popular.

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