A serial Barnes & Noble investor has just re-invested in the company. Their presence will add strife and make it harder to turn the company around.
An investment group led by Richard Schottenfeld, head of New York City-based Schottenfeld Management Corp., has acquired a 5.68% stake in Barnes & Noble.
According to a filing made with the Securities and Exchange Commission, Schottenfeld began buying B&N shares on May 29 and made his most recent purchase July 16, accumulating 4.2 million B&N shares. Schottenfeld paid between $5.32 and $6.57 per share for his stake. B&N’s shares began the year trading at $6.70, and closed at $5.65 per share on July 23.
In its filing, Schottenfeld said it purchased its stake believing B&N’s shares are “substantially undervalued and represent an attractive investment opportunity.” The filing further stated that representatives from Schottenfeld have already talked to B&N about ways to increase shareholder value, and intend to continue to hold discussions with B&N management and its board to review strategic alternatives the company might pursue.
You can find the SEC filing over here.
It's worth noting that Schottenfeld last invested in B&N in 2012, and then sold off its stock in 2015 after B&N spun off B&N Education. One of the things Schottenfeld wanted back then was for B&N to spin off the Nook division. They made this proposal only a few weeks before Nook imploded and began its permanent decline into irrelevance.
Then, as now, Schottenfeld was driven not by making B&N healthier but by getting the biggest return for stockholders. After Schottenfeld sold its stock, B&N continued to decline both in value and revenue.
Whatever Schottenfeld is proposing this time around isn't going to kill B&N but it certainly will not help the retailer any in the long run.
Really, what we have here is a light version of the vulture investment funds that buy up retailers like Toys R Us, load them up with debt, and sell them off. While Schottenfeld isn't quite that bad, they certainly aren't out to help the company, either.