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Activist Hedge Fund Buys Barnes and Noble!

Barnes and Noble might’ve been just saved!

Barnes and Noble shares had fallen about 25% since last year and has lost over $1 billion dollars. to many of you, this may come as no surprise. Barnes and Noble is dealing with enormous pressure from Amazon, and Barnes and Nobles, at least judging from a stock comparison, just does not have the muscle to deal with it. But, I could be wrong.

Vulture capitalist Paul Singer of Elliot Management bought out Barnes and Noble for roughly $683 million. Mr Singer is described by Fortune Magazine as one of the “smartest and toughest money managers” and by The Independent as “a pioneer in the business of buying up sovereign bonds on the cheap, and then going after countries for unpaid debts.”

Mr. Singer is an activist investor that uses his equity to force certain changes in order to shape a company from a money-bleeding debt machine to something that can actually make a profit. What this means for the employees is anyone’s guess, but I think it’s safe to assume that many waves of changes are about to take place. Barnes and Noble had already put all or most of their full-time employees as part-time to try to cut costs, but that didn’t stop the bleeding.

With a reputation of using his equity for activism, Mr. Singer could radically shape Barnes and Noble and give the brand longevity it needs. Now, whether or not that investment can thrive in a world where Amazon is ramping up the competition is the question I want to end with.

Let me know what you think in the comment section.