BKS Stock Pops as SEC Filing Breathes Life Into Buyout Buzz

Chairman Leonard Riggio may 'participate in the potential sale process'

Shares of Barnes & Noble, Inc. (NYSE:BKS) are trading up 3.3% at $7.32 today, after a Securities and Exchange Commission (SEC) filing indicated Executive Chairman -- and the firm's biggest shareholder -- Leonard Riggio "is evaluating, and may participate in, the potential sale process" of the company. Early last month, BKS stock gapped higher after the book seller announced it was reviewing strategic alternatives, including a potential sale. Riggio in 2013 abandoned plans to buy Barnes & Noble's bookstores.

Since the October bull gap, BKS stock has traded mostly in the $6-$7 range, with support emerging from its 320-day moving average. The equity tested the bottom of this range last week, after the company reported weaker-than-expected quarterly same-store sales. Today, BKS has broken out of its range, pacing for its highest close of 2018.

Analysts are relatively quiet on BKS, with two of thethree following the stock giving it a tepid "hold" rating. The consensus 12-month price target of $7.25 is in line with the stock's current price. However, until there's clarity on the M&A future of Barnes & Noble, the brokerage bunch could stand pat.

Meanwhile, the roughly 11.47 million shares sold shortrepresents a healthy 21% percent of the stock's available float. At BKS' average daily trading volume, this represents nearly seven sessions' worth of pent-up buying demand.