One of our commentariat who goes under the pseudonym of ‘cowtipper’ posted this information earlier today. It simply cried out for front page coverage. – Ed
Borders really cannot afford to be irrational. Having just finished financial analysis between Borders and Barnes and Noble’s for our fund, the bottom line is that Borders is in trouble and can not afford to insult its customers right now. 2006 is a critical year and the market has been asked to give management ‘one more chance’ on top of probably too many chances, hoping for some magic to occur in the fourth quarter of this year.
Borders would not handle a boycott well. Look at their most recent 10K – they are promising lousy performance through the year and praying (if we can use the word) that the market ignores their terrible financial state until quarter four, 2006, where a miracle will happen and outstanding sales will occur. Things do not look good and only irrational optimism and hope in management’s ability can sustain the market to the fourth quarter. This management team is truly lost – listen to their conference call and the real status of their mini-Borders “Waldenbooks” makeover that the call admitted has been a complete miscalculation. I’d trust a magic eight ball more than these misplaced executives.
If an organized boycott evolved in the next few weeks, Borders is probably 30-60 days from corporate reorg or collapse, a new CEO and appeasement of the boycotters. Given their money appears to come from red-state people and not leftist anti-establishment small bookstore types, their actions are further proof that management is completely lost.