Jana Already Taking Big Profits in Barnes & Noble (BKS, MSFT, LMCA)

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Barnes & Noble Inc. (NYSE: BKS) may be back in favor after the huge $600 million or so investment from Microsoft Corporation (NASDAQ: MSFT).  Jana Partners disclosed in April that it had taken a stake of about 12% or almost 7 million shares back when the stock was trading under $12.00.  That stake is now already smaller as the firm decided to be opportunistic as a seller despite the firm being considered an activist investor.

When the shares popped to above $24.00 this week based upon the Microsoft investment, Jana unloaded a portion of the stock it recently purchased.  A filing from the Securities and Exchange Commissions from Wednesday evening showed that on April 30, 2012 Jana Partners LLC sold 1,000,000 Barnes & Noble shares at a price of $24.42 per share.  The investment group is far from being out of the position because the same filing shows that it still owns (or owned) some 5,959,359 shares of Barnes & Noble common stock as of April 30.

It is of course possible that Jana unloaded more shares and that later filings will come, but the firm signaled that more good things will come for the company (see below).  On April 30 the stock traded more than 29.5 million shares and it hit a high print of $26.00 after opening at $25.79 with a close down at $20.75.  This was a true profit-taking opportunity for anyone who has bought the stock and held on in hope of a successful go-private transaction or in hopes that activist investors would win here.

Liberty Media Corporation (NASDAQ: LMCA) may be the real winner here with its stake and exposure but its shares rose less 1% on the news since its market cap is already over $10 billion.

What is interesting is that Jana’s Barry Rosenstein commented on CNBC with David Faber just on the same Monday that there is a long way to go with this stock but he would not comment on Jana’s trading strategy on this.  Rosenstein did talk a long-term game even though the newer filing shows that his firm may have been selling right into the commentary he was making.  He thinks that brick & mortar business is a value and when Jana bought it was getting the Nook business for free.  Rosenstein also noted that only 35% or so of the stock is in the free float.

It is not surprising at all that Jana would have sold some of the stake when it had a 90% to 100% or so in profits in such a short period of time.  Perhaps the only shocker should be that the activist group only unloaded about one-seventh of its position.