Microsoft Loses $238 Million on Nook

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Microsoft took the risk of spending $300 million on a 17.6% stake in the digital e-reader, Nook in April 2012. This past Thursday Microsoft sold their enormous stake, 2 million shares, back to Barnes & Noble for only $62 million in cash. Barnes & Noble claimed the deal would help the Nook business’ “operational and strategic flexibility” according to CNN.

Barnes & Noble announced in June that it would be spinning off its Nook business, after it failed to find a buyer for the struggling e-reader. As part of that announcement, the bookseller also proclaimed mass layoffs in the Nook division and offloaded production of its tablets to Samsung, stated

“We mutually agreed that it made sense to terminate the agreement,” a Microsoft spokesman said in an email. Microsoft will lose money on its initial investment, but will also be spared any future payments to fund Nook, which were running at about $21 million per quarter, stated

Rumors had circulated last year that Microsoft wanted to buy the Nook e-book business for $1 billion, but that deal never took place. Meanwhile, the Nook has failed to keep up in a market dominated by Amazon’s Kindle, Apple’s iPad and Google’s Android tablets, stated