You might think the implosion of Borders bookstores would be great for rival Barnes & Noble (BKS). But no, Barnes & Noble is struggling as well and said today it will suspend dividends to shareholders.

Previously, the annual dividend was $1 a share. Barnes & Noble also said it will stop giving forecasts for the rest of the fiscal year. The stock plunged 15% on the news and at midday was down more than 12% to $16.30.

The company's cash situation is precarious. Barnes & Noble lost $14.5 million in the nine months through January, Bloomberg reported, and will get about $60 million a year from the suspended dividend. "There's still an uphill battle from the physical side of the business," a Morningstar analyst told Bloomberg.

The problem for Barnes & Noble, of course, is that there isn't just the physical side of the business. The company has been trying to wage war against Amazon.com (AMZN) and its popular Kindle reader, and that takes money and resources.

Post continues after video:
The Kindle owns two-thirds of the e-book market in the U.S., analysts say, while the Barnes & Noble Nook has only 22%. Similarly, Amazon gets 58% of e-book sales, while Barnes & Noble gets 27%, Bloomberg reported.

Could Barnes & Noble end up following Borders into bankruptcy? It's too early to say. But the company's challenges are significant as it fights a very strong digital competitor and flagging sales on the physical side. Borders' bankruptcy did provide one ray of sunshine: Same-store sales at Barnes & Noble rose for the first time since 2007 a week after Borders filed for bankruptcy, Bloomberg reported.

Barnes & Noble put itself up for sale last year, but the company has been quiet about any progress on that front.