JANA Partners Dumps Barnes & Noble Stake ~ market folly

Wednesday, September 12, 2012

JANA Partners Dumps Barnes & Noble Stake

Barry Rosenstein's hedge fund JANA Partners has completely exited its position in Barnes & Noble (BKS).  Per an amended 13G filed with the SEC this morning, JANA now shows a 0% stake due to trading on August 31st.

JANA originally took an 11.6% stake in Barnes & Noble back in April of this year and shares spiked 18% on the news at the time as investors hoped the activist firm would save the struggling bookseller.  We also posted up their JANA's thesis on BKS.

The value here is in the company's Nook e-reader platform and that's what JANA's thesis centered on.  John Malone's Liberty Media had also made a past investment in the company.  Then shares spiked as high as $26 on news of a BKS strategic partnership with Microsoft.

Since then, shares have continually drifted down and now trade at less than half that recent peak at $11.xx.  Back in April, JANA owned 7 million shares.  In their most recent 13F filing which disclosed positions as of June 30th, they only owned 4.1 million shares.  And now they've disclosed that they own 0 shares.

Perhaps JANA exited to focus on their new activist position in Agrium (AGU).  After all, Rosenstein in May said this is the best environment for activist investing he's seen.

Or maybe JANA saw a more compelling use of the capital than BKS and decided to shift it there.  Rosenstein will be presenting investment ideas at the Value Investing Congress in just over two weeks in New York City so we'll see what he pitches.  You can register to hear Rosenstein's ideas (along with David Einhorn, Bill Ackman & more) via this link.

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