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Time too short Barnes & Noble? Reasons Why You Should No Longer Hold On To The Stock

Updated on February 19, 2014

Starting in the early 1990s, the United States has seen the decline of many bookstores across the country. Major national book retailers are forced to declare bankruptcy and to close their business. Only one remains to take on the challenge of being the last surviving national bookstore retail chain and this is Barnes & Noble.

However, with the growing concern over the financial welfare of the company, it is not difficult to see where Barnes & Noble stock is heading. If nothing will be done to reverse the effect, the company is destined to bankruptcy.

For this reason, many people ask the question, β€œIs it still a good idea to hold on the BKS stock?” The answer to this question is overwhelmingly no. Yes, the company is still earning and even able to sustain itself as suggested by Barnes & Noble stock analysis. Nevertheless, it is only a matter of time before the company will collapse, unless something will stop the worsening situation.

Company Profile

Barnes & Noble, Inc (BKS) is the biggest book distributor in the United States. It operates 675 stores and 686 college bookstores nationwide. It is founded in the year 1873 by Charles Barnes, William Barnes, and Clifford Noble. The company is known for its wonderful retail stores that feature reading and relaxation. In some instances, Barnes & Noble stock publish its own books. It has its own authors or sometimes acquires copyrights of foreign books to be printed in the English Language.

Analysis on the sale of paperback and digital books

One BKS estimates says that since the advent of the Internet age, more and more people are attracted to the idea of reading books on their mobile devices and desktop computers, as stated in BKS stock analysis. For this reason, the demands for paperback books and Barnes & Noble stock price have exponentially diminished. Since the digital version of paperback books is cheaper, portable, accessible, and reader-friendly, people are migrating from the traditional way of reading books.

To make things worse, online bookstores are even more popular with the help of the World Wide Web, which led to decreased BKS earnings. The convenience that the Internet has brought to the consumers only makes it tough for brick-and-mortar stores to keep afloat. Thus, the country has seen many American bookstores that went out of business in the year 1990s when the Internet rapidly grew its roots based on Barnes & Noble stock news.

According to BKS stock news, though the statistics may show that people are using the Internet in purchasing books, there is a problem with the discoverability of a book. Offline stores and retailers still play a vital role for a book to be liked and discovered by readers. However, according to one Barnes & Noble stock analysis, most people who go to retailers are only there to explore the choices available; since they like the digital version even more, they would go to their home and download the book. Thus, the offline store promotes the books, but it is the online store that makes the profit.

This problem is what Barnes & Noble try to fight. As part of their coping mechanism, they tried to enter the online world with their very own Nook. They partnered with Microsoft to further strengthen the marketability of Nook along with the books the company sells.

A troubled Nook

At the start of the Nook release, good reviews, comments, feedback, and high BKS earnings are attribute to it. Nook has garnered tremendous amount of praises from its own creator and forecasted that it will help the sinking company to keep up with the dynamic market of books.

However, there had been more bad news than good news about Nook. As a matter of fact, it is now the primary reason that keeps BKS stock price into trouble. According to one report, just last year, The Nook lost $500 million and this does not include the losses on the previous years before that.

What happened to Nook?

Sales continued to decrease for Barnes & Noble and what they thought to be the solution will be the reason for its demise, as BKS stock news had suggested.

Just recently, BKS announced to stop producing its Nook color touch screen tablets. This is done to curb down the expenses of the company – a wise but hard decision. Removing Nook in the premier product list of Barnes & Noble has made a drop in the stock price of the company, closing at $15.61 on Tuesday.

For the past months, BKS stock did not show any sign that it will ditch out its Nook product. This is primarily because they want to save faces and keep the good image of Nook. However, no matter how much they want to praise the product, the statistics will still have to decide the victor at the end. The hesitation also come from the fact that Barnes & Noble has poured so much investment, energy, and resources on Nook, but to no avail, the competitors are just too strong for Barnes & Noble .

Why Nook failed

Based on Barnes & Noble stock news, there are different factors that might contribute to the failure of Nook, but some are more notable. For example, Barnes & Noble was not able to drain in the minds of consumers what makes their product more powerful than Kindle, eReader, and others. Though Nook is making more than a million shipments and improving Barnes & Noble stock price in its earlier years, the sale has steady declined for the recent years. In addition to this, Barnes & Noble did not have enough funds to advertise Nook to the consumers and since other earlier devices had been already introduced in the market, people did not see why an additional eBook reader is needed, as seen in one BKS estimates.

Conclusion

There is no doubt that BKS stock price is in trouble. With the decreasing sales and increasing liabilities, the company might not be a good choice for buying shares and stocks. However, with the recent dropping of Barnes & Noble of its Nook, investors should be alert to see any improvement in its performance through BKS stock analysis.

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