Barnes & Noble: Aletheia Sells Some Stock - Insiders vs. Outsiders

by Geoff Gannon

Aletheia, a big stock fund allied with Ron Burkle, sold 71,610 shares of Barnes & Noble (BKS) after August 16th. 71,610 shares is 0.12% of the company. Aletheia can still vote these shares at the September 28th board election between Len Riggio and Ron Burkle. Shares are voted by whoever owned them August 16th.

In the last 2 months, Aletheia bought and sold stock on the same day 21 times. 15 of those days (71% of the time) Aletheia bought high and sold low. 6 of those days (29% of the time) Aletheia bought low and sold high.  Is Aletheia that bad at trading?

Aletheia owns 15% of Barnes & Noble. The public owns 26%.

Outsiders want to sell Barnes & Noble. Nothing is stopping them. Insiders want to buy Barnes & Noble. The poison pill is stopping them. If Aletheia wanted to sell, who would they sell to? Burkle? Riggio?

No. The public has to want to buy Barnes & Noble. It doesn’t. It’s the insiders versus the outsiders. The insiders are bullish. The outsiders are bearish. For Aletheia, Burkle, and Riggio, selling out would be a lot like taking Barnes & Noble public. The public has almost no net long ownership of BKS. The big guys are long BKS. The little guys are short BKS.

Buying and selling on the same day is normal for big fish in small ponds. I wouldn’t make much of it. Just keep track of Aletheia’s net sales over the long run.