Borders Group (NYSE:BGP) shares rose over four percent today after Bill Ackman's Pershing Square Capital Management disclosed an increased 17.1% stake in the company, according to a Schedule 13D/A filing with the SEC. The activist investor has reportedly been soliciting the board for its views on the firm's management, but gave no further details into his interest in the company.

Borders Group is well off of its 52-week highs of $24.15, trading at just $12.29 today. However, the company said last week that it expects its holiday sales be benefit from a toy backlash and strong best-seller lineup and customer rewards program. Management did not give an exact estimate, but did say that its fourth quarter earnings - excluding restructuring charges - will exceed last year's earnings from continuing operations of around $1.48 per share.

"If you mention the toy business, they have had a lot of issues there because of safety issues, recalls, etc.," said Borders CEO George Jones in a conference call with analysts. "We are going to have signing in our stores ... talking about what a nice, safe alternative books can be and what a great gift they are for kids."

Borders Group is also in the middle of a turnaround launched in March. The move includes the sale of some international stores, efforts to improve operates at U.S. bookstores, and the development of its own website to replace its existing agreement with Amazon.com. To this end, the company announced its decision to sell its 42 superstores and 28  Book etc. stores in the UK and Ireland for up to $40 million.

In the end, Ackman may be interested in the turnaround process combined with the potential boost obtained from the toy recalls in China. Others speculate that he may be interested in switching up management and implementing a new strategy. Regardless, these factors make BGP a stock worth watching!

Related Companies
Hastings Entertainment, Inc. (HAST)
Barnes & Noble, Inc. (BKS)
Amazon.com, Inc. (AMZN)