Barnes & Noble to Spin Off Nook E-Reader

The bookseller’s shares went up after the announcement they would split the Nook business.
5:30 | 06/25/14

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Transcript for Barnes & Noble to Spin Off Nook E-Reader
I'm Michelle president New -- -- the New York financial markets close on Wall Street for Wednesday June 25 that the story -- And one stop with the story today is Barnes and Noble's. Shares for the bookstore going up after it announced. -- -- -- -- -- Into its own little corner to break all the -- -- -- from Yahoo! finance. -- it's not a done deal yet but -- is looking to separate its own company and its own company and not just because it's been super success. Or I know it being quite because the opposite so Barnes & Noble stores and certainly weekend but they still remain profitable and -- drag on the business. His day in day new division with the new. That competitor today Amazon Kindle or maybe even apple iPad but it just. Never really caught on with consumers in the way they it was expected to you as -- a viable alternative to those other products and it's just been posting losses and into a drag for the business in -- also they've scaled back. -- -- -- -- Business but now they've announced that they are spinning it off they're gonna spin it off into its own separate company separate from the rest of its retail business. Why you spin it off why not just shut down in the division -- it hasn't been doing well like -- but -- company now. Great question I'm sure a lot of -- of -- -- for a long time so we cannot answer to that but. They have shrunk their commitment to it for example it only lost 200 million dollars in 2014 if you can believe they actually did -- attempt whenever the prior year. And they also I had announced that they were partnering with Samsung to manufacture is Saturday it would get co branded product and they would just be on the hook for that kind of contact. Cited the equation so -- -- now I don't know why they didn't decide to just -- together. But spinning off certainly separates it from their retail business so investors can say okay I like this part of the business and I want a bat on it and now. This docket actually reflecting just as part of the business that is actually decent medium my deal. And as part of the business it's a struggling part is now its own saying that you can choose to and you know leaving it got there I guess may be that -- be the you know by -- -- any value in. And could that -- look sort of compete against say the Amazon Kindle now we couldn't before is it just over for the -- You know all in judging on its past performance it looks like they've lost you know in when this product -- -- -- -- 2009 lane. Despite the fact that they Kendall head. Been doing quite well it's still really -- -- -- -- you know it had a positive response when this. Product was debuted in eight had some high profile investor dollars to from Microsoft and others but it just. Failed with the consumer just didn't take not so. Yeah I it looks like in terms of the race it lost and and terms of what the future may hold or if it improves with some of that. Changes that they've made that definitely remains an open question. And -- -- -- through that today's stock chart and give us an idea of how investors are warming up to this. They -- this announcement so the stock was up as much as 10% at one point and now it's at 5%. Are closed at 5% about half of bad out there are so investors definitely welcome the news that that there are spinning off the net division and and in addition you may be -- -- and optimists and over Barnes and Noble's turnaround strategy and that may be some debate is paying off -- because they are making some strides you know day -- They did have revving up slightly. In the fourth quarter so you know that was a positive and -- it lost 37 million dollars last quarter as opposed to 150 million in the prior quarter -- even -- the Los. It's an apartment. So that really I think it was that then that milk. News that was reflected there at the retail division of this have a stronger showing by separating. Yeah I yeah so that's the idea is Big -- did just -- retail and part of the business it's reflected. In this stock price once milk it's been -- not and it that would be something that investors -- perhaps the Anderson excited about. Because even though bookstore is we know have been dying mean border shattered its -- -- A few years ago and it's tough to find a bookstore these days but Barnes & Noble is still doing okay even though they -- -- -- people still are going. -- did their stores and buying books and buying the trinkets and having a cup of coffee or whatever so -- there are some signs of -- optimism there. And now that no company will eventually get its own little new quart of milk. -- What have you nobody puts baby in the corner but it also should help bring in our capital. -- I think that question maybe that's something that they would be interested and for now what they're doing is spinning -- as its own company going to be privately traded and it's expected to it. Complete this move up by the beginning at 2015 so probably you'll be done -- reflected in April. And said that would just allow them each be valued on their own and have dead that companies represented separately in two distinct. Publicly traded companies at her from when there -- -- fine thanks for it as a read on that. Thank you and thanks for joining us even watching -- story stocks at ABC news stuck -- for your latest headlines. I'm Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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