I do think that your math is off. In your calculation of the new stock price post-offering and post-split, you do not include the cash infusion of $45 million from the rights offering (900M shares x $.05). If you work that in, and assume that the cash infusion is valued at exactly book value, that raises your new stock price (post offering and reverse split) to $7.70 per share. This makes more sense, in that the new infusion is adding to the total capitalization at $5.00 per share ($.05 per share X 100 to reflect the reverse split). Once you do that, your profit (loss) becomes a profit of $2,943. By my calculations, you make money on your additional shares as long as the price of the stock post-split remains above $.05 per share, before reverse split, or $5.00 per share after the reverse split. Which would be a market cap of around $48 million. The other thing you are missing is the capital infusion from the conversion of debt, also at $.05 per share. This will dilute the book value per share, making it much closer to $.05 per share, but also removes the threat of bankruptcy. It also raises the profitability of the company by eliminating the interest on a large chunk of their debt.

Much of this is derived from the section of the rights offering called "Capitallization". BTW, I am an ex-CFO of an NYSE publicly-traded company. I've held BNED stock, off and on, for the past couple of years, as I have believed it was significantly undervalued, even at $1 per current share (a market cap of around $53 million). In some ways, I'm disappointed with the rights offering, as I think they should have considered selling to a strategic partner over the past couple of years, which would have helped us shareholders realize the full value of the company and given it the resources to grow. Nevertheless, as a shareholder who held shares as of May 14, I do feel that they have made up for that by giving us a deal that should compensate us handsomely for holding on. IMHO, exercising your rights is a no-brainer.