B&N Chairman Sells Shares
I wouldn’t read too much into this, but B&N Chairman Len Riggio filed new paperwork with the Securities and Exchange Commission this week. He and his wife are selling off a couple million shares of Barnes & Noble stock, leaving them with ownership and control of 26% of the company.
According to the filing the sale was below market price, at $13.81 a share, "in a privately negotiated block trade." At the time I write this post the stock is trading at $13.93. As recently as last week the stock price traded at above 16 dollars a share, but that was before B&N revealed that they were under SEC investigation.
While it would be fun to speculate as to why Riggio sold off the stock, I think I already know why. Remember earlier this year when Len Riggio announced plans to split B&N and buy the retail stores away from rest of the company?
At the time he revealed that he had acquired additional stock, probably as part of a plan to force a proxy fight and split the company. Given that we know his plans to salvage the retail stores have been cancelled now that he leads the company again, there is little reason not to sell off some of the stock he acquired.
Update: Barron's scored an interview with Riggio and he explained the sale:
Riggio explained that he owned high-cost Barnes & Noble shares purchased above $35 a share. The sale of the two million shares established a tax loss this year that can be used to offset any gains that he may have realized. Riggio presumably also owns a lot of low-cost Barnes & Noble shares.
The 72-year-old Riggio said he made the decision to sell the shares last month after consultation with his tax and financial advisors. "I don’t even follow the price of the stock. I never looked at the stock price when I was selling."
flyingtoastr December 11, 2013 um 1:24 pm
It’s worth noting that BN’s stock price rebounded after the SEC probe to back above $15 a share the next day, and has only been pushed to $14 with the rest of the market which tanked on news of the new financial rules put into effect this week.
flyingtoastr December 11, 2013 um 7:33 pm
So just to further underline how much of a nonstory this whole thing was:
Baron’s was able to get an interview with Riggio today, and he outlined the entire deal. The shares he sold were bought back in the earlier 'aughts at more than $35 a share. He sold them at such a drastic loss (to Morgan Stanley, who immediately resold the shares at a profit, ha) so that on his tax form for the year he could claim a loss from the sale to offset any capital gains he made from any other investments.
So it literally has nothing to do with BN at all. Just the rich getting away with paying no taxes like usual.
Nate Hoffelder December 11, 2013 um 7:49 pm
See, I knew it wasn’t important.
Alexander Inglis December 11, 2013 um 2:10 pm
Somewhat inflammatory headline, even for low journalistic standards of The Digital Reader. Perhaps this was intended for "The Onion"?
Nate Hoffelder December 11, 2013 um 2:35 pm
I thought it was funny.
And it’s so ridiculously over the top that even flyingtoastr knew it was a joke, so i figured it was safe.
Sturmund Drang December 11, 2013 um 5:17 pm
Besides being completely on-topic for this website I thought the article very balanced and devoid of any hint of bias, Alexander.
fjtorres December 11, 2013 um 6:50 pm
Well, Nate, as Riggio’s personal assistant, the Toaster would know if he was flying to Rio. 😉
Odd that after all the snark bandied about here, so many people miss the jokes.
Caleb Mason December 12, 2013 um 1:51 pm
I still cannot get past the Digital Reader masthead: Read more. Care Less. Talk about funny…sorry…as you were…
Nate Hoffelder December 12, 2013 um 1:53 pm
Don’t do that to me!
I checked and it still says "Read More, Carry Less". You almost gave me a heart attack.
Caleb Mason December 12, 2013 um 2:10 pm
Sorry Nate. I’m sure it is just because I am warped. It’s that old subconscious level problem. Some words just go together. The word "less" with a "Car…" before it just leads me to "care less." Years ago when Palm’s founders founded Handspring, they ran a huge ad campaign featuring…you got it… a human palm. Everytime I saw that ad I thought "nice job promoting your competition Palm fellas." Maybe you could sub "tote" for the "carry"? No charge.
B&N Stock Price Drops After Chair Riggio Reduces His Stake – The Digital Reader April 17, 2014 um 12:25 pm
[…] to be worth around $64 million, and it is his second major sell off in the past 6 months. In December Riggio sold around 2 million shares, reducing his stake in Barnes in Noble to around 26%. Another […]