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Morningstar analyst Peter Wahlstrom weighs in on the Microsoft, Barnes & Noble deal.
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Well everybody take a look at shares of Barnes & Noble the stock.
Really soaring right now it is up.
Almost nine dollars per share -- Microsoft has agreed to invest 300 million.
And it was -- and it's college text units Morningstar analyst Peter Walsh from covers Barnes & Noble and investment seems.
Positive for Barnes and Noble's book business no business do you think that the -- -- mortar stores are actually going to be an overhang of the stock.
You know actually it's funny you mention that because when we think about the bricks and mortar business whether the college -- the retail shop.
That's where we -- a lot of the value and we saw really the cash dragon the cash drain on the digital side of the business.
All right let's talk about this overall because it seems like when you can't they not looking at your note -- you wanted to put.
Near the stock under review -- -- it like Barnes & Noble prior but this is new code that is what has the analysts.
Community excited here's the fact that there could be.
A potential multi million billion dollars spin off between Microsoft and Barnes & Noble -- -- there was a conference call what's the likelihood of that now.
You know it's it's very tricky it's something that the company -- talked about they've talked about reviewing strategic alternatives.
Quite actively over the last sixteen or eighteen months and when Liberty Media came in and invested.
You know 200 million dollar stake last year we thought that -- been one of the first steps and then in January the company revisited.
Strategic alternatives so yes this a company that has a history of acquiring and divesting businesses.
Then they've been pretty Smart at at the timing.
Not Microsoft.
Microsoft -- on -- by Barnes & Noble anyone that we the simplest.
Execution here of the deal and it got -- -- they come -- outpacing you're really putting enough in the application of the note.
In a windows they were gonna fight we're gonna see that we're gonna preview its embassy at the end of the year that that -- -- -- the -- You know it's it's also very good question is something that.
In a Barnes & Noble probably had asked Microsoft's eighteen months ago in August of you know 2000.
Eleven -- -- 2010 actually.
And that's and they got kind of Liberty Media come in but nobody really wanted to buy Barnes & Noble outright.
And I think what they saw was that headwinds as saying you're going to have to invest -- 15200.
Million dollars each year just to get your digital platform up and running.
And today for Microsoft 300 million dollars not to say is a drop in the bucket but.
Compared to Barnes & Noble which we have as generating an operating loss of eighty million dollars this year and another eighty million dollars next year it's a big win for Barnes & Noble and for Microsoft which doesn't have an e-book platform and really distribution.
At all and then in the digital.
Peter -- from from morning -- Peter thanks for weighing and we do appreciate -- our.
Okay who -- you.
