Nook Considers Spinoff, Stock Tumbles

Investors are on edge after Barnes and Noble announced last week it was considering spinning off its Nook business.

Nook has been a beacon of hope for the company, whose physical book sales are otherwise plummeting, much like Borders before it went under. But according to this article by The Street, Barnes and Noble officials are hoping that a spinoff would allow the Nook to expand further, both nationally and internationally. B&N CEO William Lynch explains.

“We see substantial value in what we’ve built with our Nook business in only two years, and we believe it’s the right time to investigate our options to unlock that value,” said CEO William Lynch. “In Nook, we’ve established one of the world’s best retail platforms for the sale of digital copyright content. We have a large and growing installed base of millions of satisfied customers buying digital content from us, and we have a Nook business that’s growing rapidly year-over-year and should be approximately $1.5 billion in comparable sales this fiscal year. Between continued projected growth in the U.S., and the opportunity for Nook internationally in the next 12 months, we expect the business to continue to scale rapidly for the foreseeable future.”

The company says there’s no guarantee that the Nook will branch off from B&N and won’t say anything further until a decision is made.

That being said, stocks plummeted when the news broke, which does not bode well should Barnes and Noble decide to spin off the Nook.

As far as  I’m concerned, the Nook will do well no matter where it sells or who owns it. But it’s a matter of how it will affect B&N. Should it spin off, B&N might suffer the same fate Borders did, and that would be a huge loss for readers everywhere.

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2 Comments

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2 responses to “Nook Considers Spinoff, Stock Tumbles

  1. I agree, spinning off the Nook might not be such a good idea from the customer’s point of view. From where I sit, it looks like B&N is making a big effort to keep up with Amazon and its Kindle. I see the Nook showcased every time I go into a B&N store. If that disappeared now, it might begin to resemble Border’s.

  2. Pingback: Microsoft Invests $300M in New Nook Subsidiary | Lara's Book Club

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