Investors drive Borders stock up 30% after refinancing rumors
Investors today boosted the stock of Ann Arbor-based Borders Group Inc. after the New York Times reported late last night that Borders was claiming to be close to securing new financing.
Borders shares (NYSE: BGP) rose 30 percent to close at $1.06, marking the first time the stock has traded above the critical $1 threshold since Dec. 30.
The Times reported that Borders told publishers Thursday it was close to securing new financing from GE Capital and other sources.
Borders executives met with publishers Thursday in hopes of securing new vendor financing agreements. The book store chain said in late December it had started delaying payments to key publishers in hopes of striking new deals, and some publishers responded by halting book shipments.
"As we have said publicly, Borders is focused on putting its refinancing in place as part of its overall effort to transform the Borders' brand," Borders spokeswoman Mary Davis said in an e-mail Thursday afternoon. "Beyond this, when Borders has something to announce, we will do so."
Borders said in December it could face a cash crunch in early 2011 if its refinancing efforts failed.
That has led to speculation that the firm may be close to a bankruptcy filing if it can't get new financing and new vendor arrangements.
The Times reported that Borders told publishers its plan is "to reduce costs, improve liquidity and expand marketing efforts, as well as sell some assets."
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
Gorc
Sat, Jan 15, 2011 : 10:11 a.m.
It will be interesting to see if they can keep their stock price above $1.00. If they can not sustain a stock price over the $1.00 mark for a certain period of time, the stock will be delisted from the New York Stock Exchange.
huh7891
Sat, Jan 15, 2011 : 9:49 a.m.
Our family loves Borders and we hope they survive. We have a Kindle but it can never replace a real book. Hope they can make it thru these hard times.
modeltim
Fri, Jan 14, 2011 : 11:13 p.m.
Dead cat bounce. R.I.P.
stunhsif
Fri, Jan 14, 2011 : 10:50 p.m.
With all the good stocks to buy ou there, I cannot believe people are dumb enought to buy this stock?
a2badger
Fri, Jan 14, 2011 : 6:56 p.m.
After all, I think that Borders will survive
CynicA2
Fri, Jan 14, 2011 : 5:35 p.m.
ARRRRGH! More endless rearranging of the deck chairs on the good ship "Lollipop".
Soothslayer
Fri, Jan 14, 2011 : 5:28 p.m.
Late to adopt an "Amazon.com" style website, late to adopt an ebook reader & the market has moved on. Whats the point besides prolonging the agony & inevitable? Hope GE Capital doesn't need to get paid back... ever.
Buster W.
Fri, Jan 14, 2011 : 4:51 p.m.
I really like Borders, but really...How long are they going to drag this out? Their business model is outdated.