Borders (BGP) website has not received very much attention in the MSM and think that will change very soon.
Compete.com has a post over at Seeking Alpha that illustrates it in detail but I think just two of their graphs (below) show the story.
Let’s look at Borders.com traffic since the launch:
From an average of 250,000 visits a day to just under 800,000. Now, visits mean nothing if they are not converted to sales. Let’s look:
Borders only went live in June so the early results are nothing short of spectacular. Borders has said the site will be profitable this year and one has to really wonder the magnitude of that profit.
To have the site traffic and conversions surging both in a anemic economy and during the summer season should excite shareholders (it does me at least). Can we think maybe that the reason Barnes & Noble (BKS) decided not to bid for the company was that the price being talked about was in fact too high for them? Could it be that the price was high because management (and Bill Ackman at Pershing) are seeing the early results from the web traffic and are ratcheting up their expectations for the company’s performance and hence any offer they want from a prospective buyer??
This would explain the “financing” problem Barnes & Noble allegedly used for backing off. At fist glance it did not make sense, but maybe, just maybe Borders performance this quarter has pushed the price higher than most expect..
We’ll find out next week…….
Disclosure (“none” means no position):Long BGP
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