Well now you’ve aroused my curiosity. I’ve not slogged through B&N’ financials – who would want to – but just by looking at, say,
http://financials.morningstar.com/ratios/r.html?t=BKS
it would appear they were in the black until fairly recently.

I also believe Riggio is actually Barnes & Noble’s biggest creditor, given that B&N bought the College division from him, just before their Nook misadventure if memory serves. He wll probably try to use that to reduce the amount of cash he needs to make an offer to buy out the minority shareholders. Len’seen preparing for this for some time methinks.

This is not correct, as (to take just one source): http://www.nypost.com/p/news/business/private_parts_MQxGLcDv8DUEOW0VsIoJvI

“Credit Suisse expects the e-book division to lose $300 million this year, on top of $262 million in losses last year.”

“In contrast, the stores generated $317 million in earnings before interest, tax, depreciation and amortization, or Ebitda, in fiscal 2012.”

And again:”Without profits from the bookstores, Wall Street doubts that Nook Media — which includes the company’s college-store chain and the Nook e-reader business — can survive on its own.”

‘“Left alone, even with cash, will that business make it on its own, or is taking out the positive cash flow of retail … a death knell for Nook Media?” Credit Suisse wrote.’

Riggio appears to have decided that enough is enough, the Nook ballast will sink his ship if not jettisoned soon. The Nook as hardware is probably finished, though one more update could still be in the pipeline.

Now we can all start speculating as to who would want to buy an industry losing $250 – $300 million a year.

Nook media, on the other hand, has been so reliant on B&M sales to move readers that they refused to even try to go international. More, while early on they were licensing 3rd party hardware to access their ebookstore (Pandigital for one, if I remember right) they stopped and tightened their grip.

The NYT report said it best: they have been too reliant on the B&N brand and customer base and when it comes to consumer electronics B&N is a “small” brand but they act as if they were one of the big boys. And they don’t have the money or reach to play with the big boys; Apple, Google, Samsung.
Money quote:
“In many ways it is a great product,” Sarah Rotman Epps, a senior analyst at Forrester, said of the Nook tablet. “It was a failure of brand, not product.
“The Barnes & Noble brand is just very small,” she added. “It has done a great job at engaging its existing customers but failed to expand their footprint beyond that.”

Too much of the Nook business comes from B&N loyalists and Amazon-haters. That was an easy sale to ramp up but to hit that broader market and, above all, the international markets they’ve neglected, they need to reach beyond the loyalists; relying on the B&N brand buys them nothing in those markets.

So yes, breaking the two operations apart and letting them focus on their core businesses (like Indigo did with Kobo) is probably a good thing.
And overdue.
They really should have done it last summer, after the MS investment had Nook Media valued at $2Billion. That valuation is likely going down come thursday.
They cost themselves big money waiting.

Now the question is whether Riggio can cook up a deal to take B&N proper private. He’s tried before…