Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Was Microsoft (MSFT) Hedging Surface With Barnes & Noble (BKS)’s Nook?

Was the Microsoft Corporation (NASDAQ:MSFT) bet on Barnes & Noble, Inc. (NYSE:BKS)’s Nook just a costly hedge for the Surface tablet? That’s the possibility brought up by Cory Johnson in a report on Bloomberg West.

The comment about the Surface and the Nook tablets came up in the wake of a costly breakup between Microsoft Corporation (NASDAQ:MSFT) and Barnes & Noble, Inc. (NYSE:BKS) on Thursday. The Windows maker and the books retailer exited their deal with Microsoft losing $175 million in the process.

“I wonder more if this is really about them realizing that the Surface is working for them in the ways they want it to work. And the Nook could have been a way for them to kind of hedge their bets ahead of the launch of the Surface. What the Surface has done, it initially had a really rough run but it seems to be doing a little bit better right now,” Johnson said.

He noted that Microsoft Corporation (NASDAQ:MSFT) may thinking that the Surface is helping the company now and took the opportunity when Barnes & Noble, Inc. (NYSE:BKS) offered to pay them something to exit the Nook business.

Microsoft, Barnes & Noble, Nook, Surface, hedge, is MSFT a good stock to buy, is BKS a good stock to buy,

It should be noted, however, that this was an expensive hedge for Microsoft Corporation (NASDAQ:MSFT), even though they are one of the most profitable companies in the world. The company initially agreed with Barnes & Noble, Inc. (NYSE:BKS) to invest $605 million in the Nook business.

Their initial investment was $300 million, with more coming through to 2017. The recent buyout gave the Windows maker $125 million back, hence the loss of about $175 million.

Microsoft Corporation (NASDAQ:MSFT)’s largest institutional investor is Jeffrey Ubben’s ValueAct Capital which reported by the end of the third quarter a stake made up of about 74.24 million shares. Also by the end of the September quarter, Barnes & Noble, Inc. (NYSE:BKS)’s largest institutional investor was David Abrams’ Abrams Capital Management with about 4.12 million shares in the company.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!