Have you bought Barnes & Noble?

Barnes & Noble (BKS) in on fire these days, especially in the past 2 days that it shot up almost 30%. What happened? Well, rumors surfaced 2 days ago that Microsoft could buy the bookstore chain's Nook business, the division of Barnes & Noble responsible for making e-readers and tablet devices, with a price tag of $1 Billion. This is obviously huge positive news for BKS. Back in Sep 2012 I thought BKS was a hidden gem with a great valuation when it was trading hands at around $13. If you got in then, you should be really happy with a 77% jump from this position a little bit over 6 months. While in the long-term, I think BKS will still go up probably another 50% from here, in the short-term, I'm not so sure. At the end of the day, it is still a rumor and there is no guarantee that this deal is real and if so, will go through. A sharp decline will ensue if the deal does not materialize. So it is better to either take some chips off the table by taking some profits now or at least keep a very tight stop loss to protect your profits if bad news comes.