2024-04-19 15:15:26 ET
Summary
- Last month, Barnes & Noble Education reported better-than-expected Q3/FY2024 results and reiterated expectations for full-year Adjusted EBITDA of $40 million.
- Unfortunately, the company also warned investors of a potential equity offering "at a substantial discount to the current market price" thus causing a 15% selloff in the shares.
- On Tuesday, the company announced a number of transactions to strengthen the balance sheet and enhance liquidity. In aggregate, the company will issue 2.58 billion (!) new common shares.
- Existing shareholders should consider participating in the rights offering in order to significantly reduce their average purchase price and bet on the market assigning a higher valuation to the recapitalized company.
- However, given the massive risks associated with the recently proposed end to automatic text book fees, at least in my opinion, Barnes & Noble Education remains a highly speculative investment.
Last month, Barnes & Noble Education ( BNED ) reported better-than-expected Q3/FY2024 results and reiterated expectations for full-year Adjusted EBITDA of $40 million....
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Barnes & Noble Education: Shares Crater After Proposed Recapitalization - Hold