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Is There Any Hope Left For Barnes & Noble? Reasons You Might Gain

Updated on February 19, 2014

Barnes & Noble, Inc. or better known as BKS in the New York Stock Exchange (NYSE) is the largest bookstore retailer chain in the United States. It has earned its status as part of the Fortune 500 companies, which basically means that it is one of the highest valued companies with its BKS stock in the world. Being part of the S&P Fortune 500 also means that the stocks of this company is being sold and bought in both the NYSE and NASDAQ.

Brief Background of the company

Barnes & Noble is popular among consumers because of its wide range of products and affordable Barnes & Noble stock price. The company basically sells books, newspapers, magazines, DVDs, gifts, music, and games. Aside from this, Barnes & Noble owns the highest-rated eBook reader known as Nook. In the year 2012, the company’s annual revenue reached up to $129 Billion and a net Income of $68.687 million, based on BKS stock analysis. Together with 30,000 employees, the company was able to sustain its growth throughout the years of its existence.

While many American Bookstores are forced to cut operational cost or even forced to declare bankruptcy, BKS stock sustained its success throughout the many decades it operated. However, there is no doubt that the company is in deepwater of trouble. Because of the changing reading habits of the consumers, Barnes & Noble’s basic source of income is not doing well. The Barnes & Noble stock analysis found out that even its attempt to accommodate the change has not been successful.

Is there any reason for investors to be worried? Is there any reason that investors still have to continue buying Barnes & Noble stock from the company? What does the future holds for the company? Will they be able to bounce back from years of underperformance? Or will BKS estimates miraculously rise from the dust and continue to dominate the bookstore industry?

The current financial state of Barnes & Noble

When it comes to sales and profit, Barnes & Noble is not totally happy. There had been many reports that the traditional brick-and-mortar stores of Barnes & Noble, along with its eBook reader Nook, are failing. Barnes & Noble is the last one surviving bookstore retail chain in the United States and it seems to be in the same trouble as other American bookstores which have already collapsed. If nothing can be done to assuage the situation, the downward spin of Barnes & Noble will continue to roll off the cliff of financial debt, as suggested by BKS stock analysis.

The problem really started in the 1990s. Though BKS estimates did not really feel any change to the industrial environment. With the rise of the Internet and digital media, more and more people are migrating to eBooks. This has led to the demise of most American bookstore that cannot keep up with the growing competition. Every since the late 1990s, BKS stock price revenue is slowly, but surely decreasing. Even investors never expected the rapid decline of Barnes & Noble. Yes, they expect that the paperback bookstore industry is failing, but not at this rate.

The behavior of consumers changed along with the Barnes & Noble stock price. Instead of buying paperback books, people are going to the Internet and download eBooks. The worst part is that people visit brick-and-mortar bookstores just to know which books are nice, but when they finally find what they are looking for, instead of buying the book from the store, they go to their computer and make the purchase.

A competition that is tough to beat

When the company finally decided to enter the digital world, they need to go head-to-head against already established eBook sellers and readers. What they thought to be the solution of their problem and the reason to improve their Barnes & Noble stock price turned out to be one of the self-defeating decisions they ever make.

BKS Nook embodies the attempt of the company to go where the consumers are. Since eBooks are getting popular, they want to create a device for them to monopolize the market. However, this was never the case, as stated in the Barnes & Noble stock analysis.

According to BKS stock news, in the initial months Barnes & Noble Nook was introduced to the public, it made records. Thus, it seems to be smooth sailing for Barnes & Noble. They had the high hopes to retain the title again to be the supreme bookstore, but at this time, of the World Wide Web.

Troubled Nook

The high hopes of BKS stock were suddenly shattered as the reality started to sink in. The market of eBook readers was already saturated with other earlier brands. Barnes & Noble has to deal with Amazon’s Kindle, Apple’s iPad, Samsung’s tablets, Kobo, and other tech giants.

As months passed by, Barnes & Noble begin to sink below the competition. With no enough budgets for marketing and product promotion, the Nook eventually became just another “tablet”.

Other problems contributing to the decline of Barnes & Noble

There is no doubt that the Nook has become one of the biggest problems that dragged the company down. For its first year, it costs Barnes & Noble $300 million and another $500 million the following year. Even the expectation that the Nook and Barnes & Noble stock will regain composure during the holidays never happened.

To make things even worse, the CEO of Barnes & Noble unexpectedly resigned, maybe because of too much pressure being pounded upon him, as stated by one of the BKS stock news.

For the past months, the company started to shift its strategy, from growth and development to controlling the damage being inflicted to its body.

Investing in Barnes & Noble

While there had been bad news after bad news for Barnes & Noble, there is still a silver lining for the company. Much of the worries of investors can be lessen with the smart thinking of the company’s admin, as stated in Barnes & Noble stock news.

For the first month of the year 2014, BKS stock price made a good comeback. Though there is still much work to be done to compensate with the loss incurred for the past months.

BKS finally decided to stop producing their colored-screen Nook and let a third-party handle this part of the company. This will help the company to regain control of its operation and take away some of the liabilities that are plaguing their charts.

Yes, the company is losing sales and decreasing Barnes & Noble stock, but this does not mean that Barnes & Noble is not gaining. The company still continues to earn money, but not as much money as they did before 1990s. However, there is still good news for Barnes & Noble investors as the New Year starts to roll.

Will Barnes & Noble can still be a good investment?

Barnes & Noble recently made a good improvement on their profit margins. Slowly, the company is trying to pick up itself and study where the strategy went bad. The problem that is testing Barnes & Noble is making the company even tougher. Though most people see this as a company in trouble, investors should consider this as a good time to invest.

There is no doubt that it may be difficult to see why Barnes & Noble is still a good investment. After all, with all the bad news about its financial statistics, it will be better to leave the company until it will begin to show vitality.

According to Barnes & Noble stock news, Microsoft is showing some signs that it will acquire the Nook in its entire division. This can be good news for investors since Barnes & Noble will have a better chance to get back into the market and increase its BKS earnings. There are over 10 million Nooks that had been sold already. Each of these Nooks gives Barnes & Noble the boost it needs to stay afloat. With Microsoft dealing with the Nook, Barnes & Noble will have its hands free from this regard and concentrate more on other productive aspects of the company.

What you need to know

Investors should take a look at the fact that Barnes & Noble is really not in good shape with declining BKS earnings. However, this does not mean that Barnes & Noble is totally not a good investment anymore. People might think that Barnes & Noble is going nowhere, but this will free more stocks of Barnes & Noble. For this reason, investors might want to start investing in Barnes & Noble when the BKS stock price is still at all time low. Yes, there are risks and the risks are great, but these risks can return more profit if all goes well for Barnes & Noble. At this time, it is difficult to see the real future for Barnes & Noble and it is best to leave it to that and just wait for the next chapter to unfold for this company.

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