
Borders Spikes on Ackman's Bullish Call
(Borders article updated from Feb. 2.)
NEW YORK (
) --
Borders
(BGP)
stock is spiking massively a day after investor
said he is more confident in the company than he is in
Barnes & Noble
(BKS) - Get Report
.
Ackman, appearing on CNBC's "Fast Money," Tuesday night declared that Borders has a better risk/reward than its rival. This bullish call sent shares surging 23.4% to $1.16 in Wednesday morning trading.
The news follows Ron Burkle's attempt, through his firm
Yucaipa Funds
, to garner a 37% stake in Barnes & Noble. Currently, Yucaipa owns an 18% stake in the company.
The move would match the current stake in Barnes & Noble held by the controlling Riggio family.
Book retailers have been struggling to remain relevant as discounters like
Wal-Mart
(WMT) - Get Report
and
Amazon
(AMZM)
slashed prices on new releases during the holiday season.
As a result, Barnes & Noble reported weaker-than-expected holiday sales, prompting Barnes & Noble management to slash its fourth-quarter outlook.
Similarly, Borders posted a 14.6% plunge in same-store sales during the holiday period.
Last week, Borders also announced it will cut 10% of its corporate staff, following the news that its CEO Ron Marshall is resigning.
-- Reported by Jeanine Poggi in New York.
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