Barron’s has an article by Andrew Bary (paywalled; bypass with Google News) suggesting that Barnes & Noble stock is currently badly underpriced. Trading around $18 right now, Bary argues, B&N could be worth $36 based on the value of the company’s assets alone, especially if B&N follows through on cutting its losses (especially with regard to the Nook) and improving efficiency.

What benefits might accrue to B&N shareholders? Bary suggests B&N could split up into three separate companies—bookstores, college bookstores, and Nook—though given the improvements to Nook’s bottom line, this might be unlikely to happen any time soon. Or it might issue a stock buyback or large dividend, neither of which it is doing right now.

As with any speculative article about the stock market, the key word here is “speculative.” There are an awful lot of tea leaves out there, and the people trying to read them don’t always speak the same language in which they’re written. But it is intriguing that B&N’s stock might be even lower than the value of the company suggests it should be.

If you go by Hollywood notions of the stock market, this is the time for some corporate raider to buy a majority share and break it up for parts. (I’m sure there are plenty of reasons this is unlikely to happen in the real world.) Or it might be a good time for some company who sees a potential synergy from working with B&N to buy a stake. If B&N is primed for a comeback, that will be good news for the Big Five publishers, who seem pretty desperate to have some kind of credible competitor around to keep Amazon honest.

Regardless, I’m not about to rush out and put my money in B&N yet. Nobody’s made a fortune by betting against Amazon so far.


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