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.

With The Backing Of Microsoft Corporation (MSFT), Is Now The Time To Buy This Company? – Barnes & Noble, Inc. (BKS)

As far as the NOOK division goes, there have been some interesting developments lately.  Back in October, Microsoft and Barnes and Noble announced that their joint venture would be called NOOK Media LLC, which will remain a subsidiary of Barnes and Noble.  Microsoft has a 17.6% stake in the business in exchange for its $300 million investment.  (Note: this fact alone implies that the new venture is valued at $1.7 billion, which is over twice the current market cap of B&N.)  The goal of Microsoft getting involved is to bring one of the world’s largest digital libraries to their devices via a NOOK reading app specifically for Windows 8.

So, will this venture be successful?  Only time will tell.  The NOOK accounts for approximately 25% of the e-book market share, with most of the rest belonging to Amazon’s Kindle.

In all fairness, I cannot in good conscience recommend that people invest money in Barnes and Noble that they can’t afford to lose.  While I firmly believe that the potential rewards far outweigh the risk, especially if the NOOK begins to gain ground now that Microsoft is putting its might behind the device’s success, this stock is still a speculation play at this point.

Barnes and Noble had negative earnings for the past two years, and this is projected to continue until 2015 at least.  With the company set to report earnings on Feb. 19, any indication from management of an expected return to profitability would be very welcome news.  I’m not saying you should dive right in, but this company is cheap enough and has enough that could go well that it is worth keeping an eye on.

The article With The Backing Of Microsoft, Is Now The Time To Buy This Company? originally appeared on Fool.com and is written by Matthew Frankel.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.