Barnes & Noble Shares Plunged: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Barnes & Noble (NYS: BKS) sank 15% in intraday trading Friday on news that Liberty Media will make a $204 million strategic investment in the beleaguered book retailer.

So what: That kind of commitment would usually be a huge positive for shareholders, but it also means that Liberty's previous $17-per-share takeover bid is now off the table. Of course, given that rumors about Liberty's change of heart were already floating around (the shares are now down 40% in August alone), today's news isn't that big of a surprise to Mr. Market.

Now what: I wouldn't be so quick to pounce on this plunge. Without the glowing prospects of a buyout, buying into a company that's being punished by discounter Wal-Mart (NYS: WMT) on the bricks-and-mortar side, as well as Apple (NAS: AAPL) and Amazon (NAS: AMZN) in the digital space, isn't particularly appealing. Liberty's investment will help, but it seems too little too late.

Interested in more info on Barnes & Noble?Add it to your watchlist.

At the time this article was published Fool contributorBrian Pacamparaowns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Apple, Amazon, and Wal-Mart; as well as creating a bull call spread position in Apple and a diagonal call position in Wal-Mart. The Fool owns shares of Apple and Wal-Mart. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool'sdisclosure policyalways gets a perfect score.

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