Will Sony Buy NOOK? Big Value For Barnes & Noble

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Published
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Barnes & Noble (NYSE: BKS) lost 29% of its market cap on news that it might spin-off its NOOK e-reader operations. The book company is now worth only $850 million. That is despite its contention that digital sales rose 113% over the last nine weeks compared to the same period last year.

Barnes & Noble tried to “sell” the decision about the NOOK to Wall St. with the following comments

The Company expects fiscal 2012 digital content sales to be approximately $450 million. By fiscal 2012 year-end, based upon forecasted device sales, the Company expects annualized U.S. digital content sales will achieve a run-rate of approximately $700-$750 million.

Barnes & N0ble may have a NOOK partner in one of the largest consumer electronics companies in the world–Sony (NYSE: SNE). Sony’s “Reader” has been a failure, along with many of its other recent product launches. It has no product to challenge the Amazon.com (NASDAQ: AMZN) Kindle reader and tablets, or Apple’s iPad.  The NOOK, by several measures, has about a quarter of the e-reader market, and Barnes & Noble has a huge library of e-books.

Sony could do worse than to take a large equity position in a NOOK spin off. If the $750 million digital content sales forecast for Barnes & Noble digital sales in 2012 is right, a NOOK company could be worth $3 billion or $4 billion. A Sony investment of several hundred million would help assure that. Barnes & Noble shareholders could retain a majority interest in NOOK, and that may be more worth more than Barnes & Noble is in it entirety today.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

Featured Reads

Our top personal finance-related articles today. Your wallet will thank you later.

Continue Reading

Top Gaining Stocks

CBOE Vol: 1,568,143
PSKY Vol: 12,285,993
STX Vol: 7,378,346
ORCL Vol: 26,317,675
DDOG Vol: 6,247,779

Top Losing Stocks

LKQ
LKQ Vol: 4,367,433
CLX Vol: 13,260,523
SYK Vol: 4,519,455
MHK Vol: 1,859,865
AMGN Vol: 3,818,618