It's not just retail investors that have been drawn to the page-turning appeal of Barnes & Noble's saga. Founder and Executive Chairman Leonard Riggio, Microsoft (MSFT), private equity firms and Liberty Media (LMCA) have shown interest by snapping up a chunk of the company or announcing intentions to swallow it whole.
Barnes & Noble remains single. Riggio abandoned plans to take the company that he started private by splitting it up in two parts last summer. Two months ago Liberty Media decided to sell most of its roughly 17 percent stake in the meandering retailer.
It's against this backdrop that Barnes & Noble stepped up to put out fresh financials on Wednesday. It wasn't pretty.
A New Chapter
The stock opened higher on Wednesday on news that Barnes & Noble would spin off its Nook business, padding this year's market-thumping gains. There is certainly merit to separate its money-slurping digital books business from its traditional book sales, but the sum of its parts is still suspect.
Barnes & Noble is losing money. Comparable-store sales slipped 4.1 percent at its namesake stores during the period. The Nook business that it's separating from the physical stores closed out fiscal 2014 with revenue plummeting 35 percent for the year.
This isn't the kind of financial performance that one expects out of one of this year's hotter stocks.
It Won't Get Any Easier
The migration of readers from hardcovers and paperbacks to e-books finds Barnes & Noble chasing Amazon.com (AMZN), which sells Kindle e-readers at or near cost and subsidizes free digital monthly rentals for its tens of millions of Amazon Prime subscribers.
Barnes & Noble still has a reasonably sturdy balance sheet, and it still has assets that it could unload if it needs to. However, the days are likely numbered for the traditional bricks-and-mortar bookseller, and Barnes & Noble's model is at the wrong end of that evolutionary battle.
Barnes & Noble has the time -- and perhaps even the financial means -- to pull off the reinvention process, but the stock's rise in the face of ho-hum financial performance is a contrast that may prove difficult for the market to justify if we don't see a turnaround sooner rather than later.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com, Barnes & Noble, Liberty Media, and Microsoft. Try any of our newsletter services free for 30 days.