Business Week talks about today's developments in an article cleverly titled "Borders' Big Markdown."
Struggling bookstore chain Borders (BGP) may put itself up for sale, giving rival Barnes & Noble (BKS) a chance to buy its main bricks-and-mortar competitor.According to the article, Borders is having extreme cash flow problems and I see that its stock is selling today for something under $5 a share. If I were more of a gambler, I would be tempted to buy a few thousand shares at that price. I wonder if Barnes & Noble sees Borders as a marked down bargain right now...or if it is afraid to spend on an acquisition when faced with so much competition and heat from Amazon. I find all of this to be interesting...but more than a little sad.
Borders executives, one year into a plan to turn around the bookseller, revealed on Mar. 20 they were considering selling all or part of the company only after being hit hard by the tough retail environment and the difficult credit markets.
Running out of cash, Borders says it secured expensive financing from Pershing Square Capital Management, a major shareholder. It also suspended its dividend and reported mediocre quarterly earnings on Mar. 20, the same day Barnes & Noble also posted results.