John Malone

Barnes & Noble (BKS) shares gained almost 6% today, following an unconfirmed reportfrom dealReporter saying that the nation’s largest book chain is expected to spin-off its Nook tablet business.

Shares of B&N have bled 13 percent over the course of the past week, when Liberty Media (LMCA), the conglomerate run by billionaire investor John Malone announced it was selling 90% of its 17% stake to “qualified institutional buyers.”

Three years after bookseller Borders filed for bankruptcy, is another bookstore staple getting closer to the chopping block? Barnes & Noble NE -0.91%, the largest bookseller in the U.S., isn't a goner just yet, but the development it revealed Thursday morning is not pretty: investor Liberty Media LMCA -1.24%, which once considered buying Barnes & Noble for $1 billion, is slashing its stake and privately selling a majority of its investment in the struggling book chain.

Barnes & Noble Inc. shares rose sharply after Jana Partners, a hedge fund that has pushed for companies to sell off assets, disclosed a 12% stake in the largest U.S. bookstore chain. Barnes & Noble is considering separating its growing Nook digital unit into a separate company so investors will give it the higher valuation of a technology business. In March the company hired a new chief financial officer, Michael Huseby, who helped spin off two units while at Cablevision Systems Corp. Jana has taken an activist role in publisher McGraw-Hill Cos., proposing a plan last August to break