Darrell,
Thanks for the reply. Yes, I think the go.com alliance is a positive thing. It's not new news though, it didn't do anything for the stock the first time it was announced, or this time when the contract renewal was announced. But yes, it's positive, ANYTHING that will help garner eyeballs and help build brand recognition is positive. A lot will depend on just how successful the go.com site becomes and how visible the Borders connection is. I actually haven't gone there yet to check it out. Shame on me <g>.
No, I don't think the streets patience is eternal. That was part of my point in reflecting over Borders stock performance over the last six months. The street lost patience with waiting for Borders to aggressively react to it's competitive threats. Now, the fact that Amazon currently loses money on its business model is irrelevant to me as a Borders stockholder. Wether or not the market is rational about how it values Amazon makes no difference. What is important to me about Amazon is the fact that are growing book sales. The bookselling business is not a growth industry, which means Amazon's sales success must come at some else's detriment. Long term, Amazons business model might fail, but maybe it won't. In the meantime the damage to Borders is being done now.
It's your thought that the risk/reward ratio is well to the upside. My guess is that, right now, it about even. Borders has to show the street that it can reverse the trend in same store sales, and that it can grow web sales at least at the rate B&N and Amazon are. Until then they are on a very slippery slope. I'm guessing they've got two quarters to regain the market's confidence. If they miss your looking at getting halved yet again. That's a considerable downside to me.
Cheers -
RC
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