In the second quarter, David Abrams (Trades, Portfolio) of Abrams Capital Management bought a 3,323,574-share stake in Barnes & Noble Education Inc. (BNED, Financial), a summer spinoff from Manhattan-based Barnes & Noble Inc. (BKS, Financial) to serve the needs of students and educators.
In the third quarter, as the fall semester was beginning on campuses across the United States and students needed to get the required texts for their course schedules, Abrams added to his stake three more times by steadily increasing amounts – by nearly 400,000 shares in early August, then by nearly 2.5 million in late August, then again by more than 13 million on Sept. 11.
A week later, however, Abrams reversed his course. On Sept. 18, he sold nearly one-third of his stake – 6,351,918 shares – for an average price of $12.66 per share.
Earlier in September, Barnes & Noble Education reported sales and earnings for the first quarter of fiscal 2016, which ended Aug. 1. Because that quarter began while Barnes & Noble Education was still part of Barnes & Noble Inc. and ended after the spinoff, quarterly numbers had to be determined on a carve-out basis. Barnes & Noble Education reported sales went up 5.9% compared to the preceding year, and net losses were higher than the preceding year.
Barnes & Noble Education has a market cap of $620.3 million. Abrams is Barnes & Noble Education’s leading shareholder among the gurus; at the end of the second quarter, Jim Simons (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), First Pacific Advisors (Trades, Portfolio), Michael Price (Trades, Portfolio), Mario Gabelli (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) had shares of Barnes & Noble Education in their portfolios.
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