Borders Catches Cold, Sony Reader Gets Pneumonia?
NEW YORK (Reuters) – Book retailer Borders Group Inc (BGP.N) on Thursday suspended its quarterly dividend and said it was reviewing strategic options, including the sale of some or all of its businesses, and its shares sank more than 30 percent to a new year low.
The company said its largest shareholder, Pershing Square Capital Management, had agreed to loan it $42.5 million and will receive options to buy a 19.99 percent stake in the company at $7 a share. Without the funding, the company may have faced liquidity issues, it said.
“Borders effectively announced this morning that they are out of cash and took a stopgap funding” from Pershing, Credit Suisse analyst Gary Balter said in a research note.
This cannot be good news for Sony or the Sony Reader, either.
If people aren’t going into Borders, they won’t see the Reader.
And, if they’re not buying anything to begin with …