Barnes & Noble Shares Jump as Company Explores Sale (BKS)

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Shares of bookseller Barnes & Noble, Inc. ( BKS ) rose sharply in premarket trading Wednesday, after the company announced late Tuesday that it is exploring options for a potential sale.

The New York-based company, which has struggled along with other brick-and-mortar booksellers under economic pressures and the technology shift away from paper books, said it could sell its famous chain to an investment group that includes its founder and largest shareholder, Leonard Riggio.

B&N said it is evaluating multiple options to help boost shareholder value. It noted that a committee of four directors will explore its options, and that it hired Lazard as its financial adviser during the process.

Barnes & Noble shares rose $3.26, or +25%, in premarket trading Wednesday.

The Bottom Line
We have been avoiding shares of BKS since our early June 2008 coverage began, when the stock was trading at $27.31. The company has an unsustainable 7.79% dividend yield, based on last night's closing stock price of $12.84. The stock has technical support in the $11 price area, which are approaching all-time lows. If the shares can firm up, we see overhead resistance around the $16-$18 price levels. We would remain on the sidelines for now.

Barnes & Noble, Inc. ( BKS ) is not recommended at this time, holding a DARS™ Rating of 3.1 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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