SAN FRANCISCO ( TheStreet) – Microsoft (MSFT) gained momentum after an analyst boosted his price target on the company in addition to Barnes & Noble (BKS) announcing it would pay Microsoft more than $62 million in a cash-and-stock deal to repurchase shares in its Nook e-reader. Sprint (S) , meanwhile, soared after announcing it partnered with Computer Talk to integrate contact center capabilities into its unified communications tool.
Nomura Securities analyst Rick Shermund raised his price target to $56 to $50, keeping his "buy" rating as he believes the company could buy back a significant portion of its stock. "We are of the view that the new Board may soon take up the issue of returning cash to shareholders," Shermund wrote in the note. "We look at several different scenarios ranging from a substantial leveraged recapitalization when the company might repurchase half its stock over a multiple-year period (probably not likely) to a more moderate, but still shareholder value enhancing, 5% - 10% share repurchase."
Microsoft had been largely viewed as a potential buyer of Nook, after Barnes & Noble announced plans to spin it off into a publicly traded company. Back in 2012, Microsoft had committed $605 million to further Nook's development, notes Forbes in a report. Under the arrangement, Barnes & Noble will pay Microsoft $62.4 million in cash, as well as 2.7 million in stock, according to a Barnes & Noble filing with the Securities and Exchange Commission.
In announcing the termination of the agreement, Barnes & Noble stated in its SEC filing that it would allow the company to "continue its rationalization of the NOOK Digital business and enhances the company's operational and strategic flexibility."
Microsoft's gain came amid a retraction in the markets on Thursday. The Redmond, Wash.-based software giant rose 1.6% to close at $48.83. Barnes & Noble investors did not share that sentiment, pushing its shares down 5.4% to $21.03 at the close.