Borders (BGP) reports earnings tomorrow and while one would not expect stellar results, there some things that could give us real clarity into the future.
Borders expects operating profit, excluding one-time items, to be $1.45 per share or less in the fourth quarter. Analysts predict profit of $1.42 per share on revenue of $1.34 billion.
The key to Borders is Bill Ackman. He has upped his stake to 24.4% and has had discussions with management. Recently he was able to get a Pershing partner, Richard Mcquire appointed to Borders board of directors.
Based on Ackman’s success at McDonalds (MCD) and the fact he initially bought in at $24 and doubled down at $12, one has to think there is considerable upside from here.
Let’s assume the quarterly numbers meet expectations. What we are looking for is clarity. We want to know results at the newest location. Now that Ackman has a voice on the board, are there any announcements coming. Debt reduction? share repurchases (not likely). When the sale of the Australian is completed, what is the use of those funds going to be? Recent negotiations on the sale of it were terminated but it is a matter of time before a buyer is found.
The website. What expectations are there. What did they receive from the Amazon (AMZN) partnership and by how much do they expect to exceed that with their own site.
When is the new concept coming close to me? One was announced in Massachusetts but I am not willing to travel an hour for a bookstore. A central Massachusetts location is needed. Alright, this last one will have no effect whatsoever on the stock but I would like it.
Disclosure (“none” means no position):None
3 replies on “Borders Earnings…..”
Borders Swings to Profit,Considers Selling Itself
Wall Street Journal, 03/20/2008
“Borders Group also announced it secured a $42.5 million loan from Pershing Square Capital Management L.P. and a backstop purchase offer of $125 million which gives Pershing the right to acquire Borders Group’s Paperchase, Australia, New Zealand and Singapore subsidiaries, as well as its 17% interest in Bookshop Acquisitions Inc. Pershing was also issued 14.7 million warrants to acquire Borders Group’s common stock at $7 a share for a term of seven and a half years. The financing commitment is expected to be completed within the next two weeks.”
Wow Todd I expected to already see your thoughts on Border’s being for sale. I see at least one other reader was expecting the same.
Don’t leave us hanging!
-Nick
sorry…
working on it