Barnes & Noble CEO William Lynch purchase a kindle from Amazon? Or got a hold of a new iPad mini? Well it sure does appear that William Lynch believes in the Kindle and iPad like tablets more than his own company’s Nook, as he sold the majority of his shares of his own company. The Barnes & Noble chief executive officer sold 30,000 shares of his stock at a value of over $520,000.
Lynch’s sold shares (ticker is BKS) at an average of $17.48. After the sale he still own 709,110 shares of the book retailer. This gives him an ownership of over 1% in Barnes and Noble. This is not a good sign for Barnes and Noble. The company is already seen sharp short interest, as over 50% of the company’s shares are short. Investors do not believe in Barnes and Noble turnaround or ability to compete in the growing e-commerce world.
Barnes and Noble shares have traded between $9.35 and $26.00 in the last year. The company was once a takeover target, but that idea has seemed to fade away. In April, the company announced that Microsoft would be taking a partial ownership stake (17.6%) in a new Barnes and Noble subsidiary aimed at e-readers. Microsoft invested $300 million in the unit and saw shares of Barnes and Noble jump over 80% after the announcement was made.
The investment in the Nook e-reader business by Microsoft will probably not be enough to save the business. Shares were over $25 at the time of that deal. The CEO of the company who creates a survival and turnaround plan is now selling at $17 and change, which makes me believe something isn’t sitting right.
So perhaps William Lynch finally purchased an Amazon Kindle and saw that it really knocks his product out of the ballpark. Perhaps Lynch played with a relative’s Apple iPad on the Fourth of July. Or most likely Lynch takes to the internet and sees that a new tablet from Google and rumors of an iPad Mini are taking over the internet and could absolutely demolish the Nook’s existence. Either way if Lynch is selling, perhaps those invested in Barnes and Noble should consider selling as well.
Lynch is not alone as a handful of other officers of Barnes and Noble have dumped shares of the company. Since May, a total of over 75,000 shares have been sold by insiders. Three insiders who sold in May received over $18 a share. Two insiders in June fared worse barely getting $15 a share for the book retailer.
William Lynch is the former founder of Gifts.com, which is now owned by InteractiveCorp. He has also worked for Palm, Home Shopping Network, Seagram’s, and Guinness. He has been CEO of Barnes and Noble since 2010 and has been with the company since 2009.