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Time to Turn the Page on Barnes & Noble?


How does the retailer plan to transform the obvious demand for digital content into profits for Barnes & Noble shareholders?

Confused by all this? If so, you've got plenty of company – and that's the biggest problem that Barnes & Noble has to grapple with. Investors can cope with a big earnings "miss," and even outsize losses. Just talk to Amazon's (NASDAQ:AMZN) rabid fans. What they can't tolerate is confusion and uncertainty, known on the street as a lack of "visibility." With Barnes & Noble these days, the visibility is about what it might have been in one of London's most notorious pea-souper fogs, the kind that caused people to fall off sidewalks and break their legs or walk out in front of oncoming traffic.

Is Barnes & Noble really going to outsource production of the Nook? Huseby didn't seem to have a clear answer, instead blaming ousted CEO William Lynch for crummy forecasting of consumer demand for the devices. Can the company exist as a single entity, as the new approach suggests, or, as Riggio first argued earlier this year, might it fare better as two separate businesses? Above all, how does the company plan to transform the obvious demand for digital content into profits for Barnes & Noble shareholders?

So far, the lack of detailed information on all of these questions is demoralizing. Stock market investors, when they buy shares in a company, are betting on future expectations and the potential for growth, not just for a share of what the company has already achieved. That's why Apple's (NASDAQ:AAPL) stock price has come under so much pressure in the last 18 months, in spite of the mountain of cash sitting on its books. If management seems confused and unable to agree on where that potential lies -- a key ingredient that needs to be in place before we can start discussing what the best strategy is to realize that potential -- then there is little hope that long-term investors are going to stick around and tough it out.

Editor's Note: This article by Suzanne McGee, originally appeared on The Fiscal Times.

For more from The Fiscal Times:

Amazon Eyes More Profits with Less Shipping

What if Apple Loses Its E-Book Price-Fixing Case?

The Real Amazon Price War: Where Should Its Stock Be?

Follow The Fiscal Times on Twitter @TheFiscalTimes.
No positions in stocks mentioned.
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