Barnes & Noble's Shares Popped: 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 bookstore chain Barnes & Noble (NYS: BKS) jumped as much as 16.9% on huge volume, nearly erasing yesterday's 17% crash.

So what: On the heels of another disappointing earnings report, analyst firm Maxim Group slapped a "buy me" sign on Barnes & Noble with a $20 price target. The firm sees Nook e-book readers carving out a market amid Amazon (NAS: AMZN) Kindles and Apple (NAS: AAPL) iPads, eventually moving the venerable bookstore out of retail operations and into a digital subscription model.

Now what: Drawing further parallels to Apple, Maxim thinks those bricks-and-mortar stores will be a competitive advantage much like the Genius Bars in Apple stores. That makes sense on the surface, but let me just point out that Blockbuster already tried that two-pronged approach in a digital media market and, uh...it didn't work out so well. Just think about that for a second before backing up the truck to buy Barnes & Noble here.

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At the time this article was published Fool contributor Anders Bylund holds no position in any of the companies mentioned. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and Amazon.com, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

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