Billionaire hedge fund manager William Ackerman thinks Amazon.com should consider making a bid on Borders Group. Mr. Ackerman holds a substantial stake in the struggling book and music chain.
His reasoning, other than making something out of his investment, is that Amazon will soon lose any tax advantage it has as a pure-play e-tailer as states require it to collect sales tax. Without the advantage, Amazon will need other means to put itself in front of consumers.
"Amazon could buy the company for about $400 million to get those locations that would take more than $1 billion to build," he told reporters, according to an Associated Press report. "You have to think of it like how Apple has retail stores across the country."
Mr. Ackerman sees Amazon being able to sell items beyond books and music as providing it an immediate advantage not enjoyed by Borders.
Discussion Questions: Would it benefit Amazon to add Borders' bricks to its existing clicks business? Do you think Amazon can go on indefinitely as a pure-play e-tailer or will it eventually have to open physical store locations?