Barnes & Noble to spin off Nook

Barnes and Noble will report first-quarter figures on Tuesday 9 September. The consensus is for revenue of $1.25 billion and an operating loss of $34.95 million.

Barnes & Noble CEO Michael P. Huseby
Source: Bloomberg

Barnes & Noble is trading at $23.96; the stock is up 42% since book retailer reported its fourth-quarter numbers for 2014 in June when revenue rose by 3.5% to $1.3 billion.

In its previous update, the company announced plans to spin off the Nook business from the retail section of the company. The tablet business has struggled to compete with the iPad and the Kindle; more details regarding the spin-off may be revealed in this announcement. The disposal of Nook will come in the form on an IPO; given that recently posted declining revenue and on operating loss I wonder whether there by much demand for the company.

Equity analyst are fairly neutral on the stock: out of the seven recommendations, two are buys, three are holds and two are sells.

If the company can give positive guidance of the new company without Nook, it could target $25, with the 50-DMA of $22.43 acting as support.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.