20160104_114047_HDRWhile Barnes & Noble customers continue reading books, investment-advice sites like the Motley Fool and Seeking Alpha continue reading tea leaves. I suspect the customers are getting more out of the equation.

Here’s a Motley Fool piece from a couple of days ago promising to explain “why Barnes & Noble, Inc. stock jumped 27% last month.” Only it…kind of doesn’t, really. Or if it does, the explanation isn’t a terribly satisfying one. B&N’s February earnings report “showed the company’s business stabilizing,” essentially.

But there is this tidbit: “Ironically, B&N’s greatest problem is the Nook division, which looked like its savior not too long ago.”

20160104_112629_HDRGlancing at my “finance” inbox, which gets my Seeking Alpha article subscriptions, I find this piece from a month ago—just after the earnings report. B&N says it doesn’t plan to pull the plug on Nook, but CEO Ronald Boire explains “We are actively engaged in exploring a number of alternatives to materially reduce NOOK’s expense structure.”

A comment beneath the article points out that just because the market ticked up doesn’t mean Barnes & Noble suddenly rose from the ashes.

No doubt B&N can reduce the Nook expense structure… if anyone has seen the floor space, signage and expensive displays for the product… for an outdated product which is entirely too expensive for its specific usage, as Moore’s Law continues to run on and on, with plastic models for 5-year olds, that talk to you!

It goes on to suggest that B&N should be using technology to create a competitive advantage, taking advantage of its status as a major media distributor that could “do it better and cheaper than Amazon.”

While I don’t know about that, I’ve said before that Barnes & Noble has done an altogether terrible job of competing with Amazon on the e-book front, and it should be trying to do better. That includes taking advantage of having physical storefronts in so many places where Amazon has nothing.

If it can’t do that, then maybe Barnes & Noble should go ahead and dump the Nook altogether and concentrate on doing what it does best—being a physical bookstore. Even if it’s not a perfect bookstore (the way it doesn’t pricematch its own web site is still turning people off), it at least seems to be doing all right financially at it. B&N might be more valuable as a still-in-business physical book competitor to Amazon than an out-of-business e-book competitor.


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