Bookseller Barnes & Noble ( BKS) has had a rough time of it during the recession, and even now, taking a 25% haircut to its share price in 2010. That decline has, in turn, spurred short-sellers to take positions against the stock amid mounting financial challenges for the company. Today, Barnes & Noble sports a short interest radio of 19.2, suggesting that it would take nearly a month for short-sellers to exit their positions at current volume levels. Barnes & Noble is the biggest brick-and-mortar bookstore chain in the world, with physical locations, a growing college book business, an online sales presence and even a publishing arm. But that diversification hasn't spared the firm from languishing sales and growing debt from its latest acquisition spree. The online store could be the key to regaining some of the market share lost to digital rival Amazon.com ( AMZN) in recent years -- and so could the Nook, the company's popular e-reader, which is tied to its online store. Speculation has been mounting this month that BKS's largest shareholder, Bill Ackman's Pershing Square Capital Management, was trying to facilitate a Barnes & Noble buyout by a competitor for $16 per share. While those rumors are only that at the moment, the surge in interest for Barnes & Noble could mean that a price recovery is sooner to come than anticipated. In the meantime, income investors should continue to be drawn in by the company's hefty 7% yield, which is somewhat secured by the company's ample cash generation abilities.