At the buy-side equity site SeekingAlpha, a column submitted by Catablast Media suggests that very thing – and goes even further, saying that “further operational difficulties at Borders will drive interest in a possible Barnes & Noble/Borders merger or private equity deal.”
Why? Think of it this way: the two chains are underperforming on the stock market, with B&N down 18% and Borders’ down over 30%. Putting them together means that the stock value has a chance of normalizing and investors can start making back some money once more. And another reason why Catablast believes “B&N stock is the smarter play” is because unlike Borders, they haven’t tried to get into the music market so heavily – and thus taken a bath thanks to MP3 players and music downloads.
But then, Catablast believes bookstore stocks are bad bets anyway. “The book space is a mature industry with flat sales; companies spend heavily on luring customers away from each other and profitability is low.” So if B&N won’t buy Borders out, who will? Oh, a private equity firm perhaps…