With a new CEO looking to bring Borders Group (NYSE: BGP) back to viability and a stock price hovering at less than than $2 -- but up big time from its 52-week low of 34 cents -- the company is revamping its board of directors in a big way.
The company is reducing its board of directors from 10 members to 8; Edna Medford and
CEO Ron Marshall has embarked on an ambitious turnaround plan. 900 employees have been fired since the beginning of the year, and the company has also slashed debt and inventory as part of an effort to strengthen its balance sheet to increase the chances of holding up during a prolonged downturn.
So far the market has reacted extremely positively to Mr. Marshall's decisive action, and the stock is no longer trading like the company is on the brink of bankruptcy. The company also announced that it was canceling its plan for a reverse-stock split because the rise in stock price has no longer made it necessary. Long-term though, the company still appears to be at a huge competitive disadvantage in comparison to its better-financed competitors. Given the lack of interest the company attracted when it tried to sell itself late last year and the recent run-up in the stock price, it's probably a stock worth avoiding.
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