Microsoft Corporation (NASDAQ:MSFT) has unloaded its stake in Barnes & Noble, Inc. (NYSE:BKS)‘s Nook. Microsoft will receive $62.4 million plus 2.7 million shares of Barnes & Noble for the stake. The shares would be valued at around $55 million at current market prices. Barnes and Noble is down nearly 9% to $20.27 as of writing on the news.
Microsoft invested $300 million in 2012 in Nook
In April, 2012, Microsoft invested $300 million into the NOOK Media subsidiary of Barnes & Noble giving it a 17% stake. Beyond losing money, Microsoft did not get a lot from the NOOK relationship and this year Barnes & Noble announced a partnership with Samsung. At the time of investment, Microsoft was looking for ways to secure content and applications for Windows 8 and felt it couldn’t rely on its competitor, Amazon.com.
Barnes & Noble to spin off Nook
In June, Barnes & Noble announced plans to spin off the money-losing Nook business. Investors had prodded the company arguing that the less exciting but profitable book store was being held back by the money losing business. Nook posted a loss of $37.6 million in EBITDA or earnings before interest, taxes, depreciation and amortization in the 2nd quarter.
Barnes & Noble Stores remains profitable
While conventional wisdom is that Amazon has killed the book store, Barnes & Noble stores remain profitable and the company’s results have been held back by the money losing Nook Division.
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