This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Barnes & Noble's Musical Chairs Game Leaves Clues for Investors

Stocks in this article: BKS YHOO ZNGA AMZN

NEW YORK ( TheStreet) -- With all the changes in the C-suites at Barnes & Noble (BKS), investors can kiss goodbye hopes of improvement in the next earnings report unless the book seller can pull a Yahoo! (YHOO) or Zynga (ZNGA) and attract a star-level executive.

Business-card makers stay active with CFO Michael Huseby taking over as president of Barnes & Noble and CEO of Nook media and Controller Allen Lindstrom is the new CFO. Mitchell Klipper, CEO of Barnes & Noble Retail, and Huseby report to Leonard Riggio the largest shareholder and company chairman.

One image that comes to mind thinking about Klipper's burden of reporting retail performance to Chairman Riggio is a "Star Wars" scene when a Galactic Empire general reports a failure to Darth Vader. Fortunately, Klipper isn't concerned Riggio can choke someone through mind control.

In all fairness, it's impressive how Barnes & Noble retail is reinventing itself and changing itsproduct offering. Toys and other seemingly non-related products that can now be found inside the retail stores are not a complete solution, but the company is rightly focusing on the demographic walking inside the doors.

Although the net number of stores is declining, at least the company is identifying locations with earnings potential. For shareholders, it's a much better place to be than simply closing stores and no hope of making a profit anywhere. It's not enough, though, and as content consumption demand moves from physical books to digital downloads, the margins for both retail and online will compress.

Investors considering buying shares should ask themselves first, would I rather slam my head with my keyboard or directly compete with Amazon (AMZN) for book sales? Either way you're likely to need aspirin soon.

I wrote an article after Barnes & Noble reported earnings titled "Surviving Barnes & Noble in an Amazon World". Amazon doesn't care if it makes money, Amazon's objective is to increase market share. It's an awkward situation for smaller competitors and will remain depressed until Amazon focuses on margins instead of revenue.

While pulling the plug on the color Nook and dropping the price in the U.K. to clear the devices off the shelves (likely warehouse and retail), Amazon decided it was a nifty idea to discount the Kindle in the U.S., U.K., and the rest of Europe. When Hewlett-Packard (HPQ) and BlackBerry (BBRY) clearance-priced sales to push their overstocked tablets out the door, people rushed to buy them.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs