Shares of Barnes and Noble plummeted Thursday following the company’s announcement that it will explore options to spin-off its Nook digital unit. Company stock had fallen over 20 percent in morning trading, a response to a company release that also disclosed that Barnes and Noble has lowered its yearly revenue guidance.
The release also reported “record” Nook sales, divulging that sales of the Nook Tablet eclipsed expectations. The Nook Tablet is a solid device, with a screen and overall layout more suited to reading than the cheaper Kindle Fire, though it still falls behind the Fire when it comes to the diversity of video available on the device. Sales of its Nook Simple Touch, however, fell short of projections.
The company has made an effort to make a deeper commitment to the line in recent months and has decided to ”pursue strategic exploratory work to separate the Nook business,” the release said. The Nook line has drawn i n around $1.5 billion in sales in the past fiscal year and the company has its eyes on overseas expansion.
The Associated Press reported that Barnes and Noble Chief Executive William Lynch hopes to increase visibility of the Nook, which has often been overshadowed by other e-readers such as the Amazon Kindle line. “We want to unlock value and shine a bright light on that business,” he told the news organization.
The company was quick to caution that it’s still in the research stages of its plan and that it has no current timetable for review and no guarantees that its exploration will actually result in a spin-off.