Barnes & Noble: How the Mighty have Fallen

auction Multiple news sources are reporting that Barnes & Noble, the bookseller with 720 stores and the recent Nook e-reader, is thinking about putting itself up for sale. (Full disclosure: B&N is my favorite book or any other kind of store. I’m a fan.)

Being a publicly traded company, B&N is constantly under pressure to try and make its stock performance attractive for investors. And it’s falling short. So one of the options is to put itself on the auction block. Possible buyers include the founder and chairman of the board Leonard Riggio who, it’s said, is looking at putting together an investment group to buy out the company and take it private.

Even though B&N still sells some 300 million books a year, we get these startling statistics about how the B&N behemoth as fallen from its high perch of just a few years ago:

Today, Barnes & Noble has a market capitalization of just under $950 million—even after a 25% run-up in after-hours trading Tuesday in the wake of the announcement. In comparison, chief competitor Amazon.com Inc. has a market cap of around $55 billion. In 2001, Barnes & Noble was worth $2.2 billion and Amazon $3.6 billion.*

Translation: Nine years ago B&N was worth $2.2B and Amazon was worth $3.6B. Today? B&N is worth $950M (less than half its previous value) and Amazon is worth, yikes, $55B! Need I say more? Sorry to be the bearer of bad news, but if you have a Nook, sell it on eBay now and buy a Kindle. If you haven’t yet purchased an e-reader, buy a new Kindle 3 for $139.

*Wall Street Journal (Aug 2) – Barnes & Noble on Block

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