In Tale of Two Bookstore Stocks, Digital Strategy Sets One Apart

The controlling shareholder of Books-A-Million of Birmingham, Alabama, offered to take the company private, valuing the 257-store chain at just $49 million. The news pushed Books-A-Million shares up 25% to $3.19 in 4 p.m. trading, returning them to where they were a few weeks ago. Barnes & Noble stock surged 52% on the Microsoft news to close at $20.75, its highest level in nearly two years. The run-up lifted the company's market capitalization to $1.4 billion. The difference between the two companies is simple: Barnes & Noble has a robust digital business, with the Nook e-reader and e-book store, which has a 27% share of the U.S. market. Books-A-Million doesn't, and instead is a pure play in the declining business of physical books. The retailer offers books on its website as well as through its stores and also sells the Nook.