Stock Watch: Fatbrain Scores with MightyWords Deal

Fatbrain.com (Nasdaq: FATB) rose 1 7/8 to 9 1/2 Tuesday after the online book company said it would separate its MightyWords unit after arranging for $36 million in venture capital investments for the subsidiary.

Barnesandnoble.com (Nasdaq: BNBN) is investing $20 million for a 30 percent stake in MightyWords, an online publishing company. Vulcan Ventures is putting in $10 million, and other investors — including Millennium Technology Ventures, Highland Capital Partners and APV Technology Partners — will invest $6 million.

Fatbrain said it will receive about $8.5 million from MightyWords, which it will use for working capital. The company will retain a 23 percent stake in MightyWords.

Fatbrain also announced a new chief executive officer, Dennis Capovilla. He takes over from founder Chris MacAskill, who will remain as chairman and serve as chief executive of MightyWords.

Fatbrain will concentrate on co-branded “information stores” for companies that want to compile, catalog and merchandise information, Capovilla said. Large organizations in particular want an “online bookstore-like” way of getting information to employees, customers, partners and others, he said.

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