It looked to many as if gazillionaire John Malone was nuts a couple of weeks ago when he offered $17 per share — aka $1 billion — in cash, no less, for Barnes and Noble stock. Now some feel he’s looking like a cheapskate.

As a Bloomsberg News report explains, B&N is now trading for 15 percent above the $17 per share of Malone’s bid. And some analysts are saying B&N might actually get $24 per share — “41 percent higher than Malone’s bid and almost double the stock’s average price before the offer.”

What’s going on? Just four days after Malone’s offer, fellow gazillionaire Ron Burkle, a B&N shareholder (via his company, Yucaipa Cos), who tried and failed to wrest the company away from the Riggio family last year, bought a huge new chunk of stock, at a higher per-share price than Malone had offered. It indicated to many that Burkle, supposedly a smart fella, thought the price would keep going up. As one analyst tells Bloomberg, “Why would he acquire shares if he knew the stock was worth $17?”

A “think” piece on the Forbes blog, meanwhile, endorses the idea that we are indeed dealing with geniuses when we discuss people like Malone and Burkle:

Malone knows what he is doing in making this bid, and Yucaipa’s principal, Ron Burkle, knows what he is doing in upping his stake.  What they both understand is that although eReaders in general are not a technical marvel, they are a marketing advance.

Commentator Brian Caulfield‘s explanation of this is worth quoting at length:

King Gillette is both praised and blamed, in various readings of economic history, as the inventor of the “razor and blades” business model.  He is supposed to have intuited that if he sold inexpensive razors, pricing them at a loss, he could then sell the men who bought them a life-long stream of blades designed to his razors,  and that his buyers would end up paying more than if they had started off with a competitor’s more expensive safety razor.

In his 1985 book “Innovation and Entrepreneurship,” Peter Drucker, the preeminent thinker  of the twentieth century in the study of business management, wrote that Gillette’s early customers “surely knew” that they were paying more for the whole combination of razors-and-blades than they might have otherwise.  Customers as a rule “are more intelligent than either advertising agencies or Ralph Nader believe.  But Gillette’s pricing made sense to them.”

On Drucker’s view, which I share, customers accepted the Gillette arrangement because what they wanted to pay for was not the tangible thing, the blade, but the service, a safe convenient shave.   Gillette’s advance was to shift the ground of competition toward the pricing of that service.

It’s a business model regularly cited by business people who want to show a deep understanding of — and a deep sympathy with — the consumer. The problem, of course, is that these caring geniuses are so smart they miss the obvious and overriding truth: The main thing consumers who want to shave know is that they don’t have any fucking choice. And that’s the less cynical reading. The more cynical reading is that this is a piece of faux-intellectualism intended to cover up the fact that consumers are being bullshitted.

Thus, Caulfield’s conclusion — “A quite analogous development is underway today in the world of books.  Any eReader is a razor, the eBooks are the blades” — while seemingly, sadly accurate, also means that the powers dominating the digital book biz right now are either idiots, or cynical bastards who think books have no more value than razor blades.