Joined: 27 Mar 2006
Posts: 211
Location: east of the Mississippi and north of the Ohio
| Posted: Wed Aug 13, 2008 1:50 pm Post subject: What's Behind Sears's Sudden Rise? | |||
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What's Behind Sears's Sudden Rise?
Pretty much the same stuff from Kiplingers today, except for this:
Don’t think I’d seen this idea before. Interesting twist LT 
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Joined: 28 Apr 2005
Posts: 1634
| Posted: Wed Aug 13, 2008 4:12 pm Post subject: | |
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I'll go with this scenario:
"But other dismal scenarios aren't easily dismissed. For example, instead of Sears shares benefiting from a short squeeze, the company's business suffers as consumers continue to feel the squeeze from dropping housing prices, high gas prices and general economic concerns. That depresses retail spending. And those who continue to spend bypass Sears and Kmart stores for cooler Target outlets and cheaper Wal-Mart and Costco stores." |
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Joined: 06 Jul 2003
Posts: 6727
Location: Central CA
| Posted: Wed Aug 13, 2008 4:16 pm Post subject: | |||
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I was just reading that article. Interesting the way they can do just about whatever they want with the stock price including selling shares they don't even own in order to manipulate the market. Fine upstanding citizens, those Wall Street guys.
I'm not getting this bit though about taking it private and then REALLY turning it around. Do they mean turn it around as a retailer? Actually make it work selling merchandise? In that regard he's done nothing but wholesale damage to it so far. If he's capable of REALLY turning it around, why is it that the retail side of the business is in the toilet? And if it does private, is he suddenly going to start investing HIS OWN (ESL's or RBSP's) money in cap ex, advertising and marketing, the lack of which has contributed mightily to the current failure? I guess it's possible but until I see it, I'm having a certain problem with it. Actually the same problem I always have when I see the major hedgies involved start playing with the stock price: 
I did get an idea of how the short squeeze works though.
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Joined: 28 Apr 2005
Posts: 1634
| Posted: Wed Aug 13, 2008 4:29 pm Post subject: | |||
I think it's just a fantasy. If Lampert had a secret plan to tank the stock and then turn the company around, he wouldn't have wanted to prop up the earnings per share and demand for the stock by repurchasing shares. He could have let the stock tank as much as possible and then bought the shares cheap. These analysts will go to great lengths to not realize the emperor wears no clothes. |
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Joined: 08 Jul 2003
Posts: 4780
| Posted: Wed Aug 13, 2008 4:53 pm Post subject: short on speculation | |
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This author seems to understand the SHLD stock price better than others-he understands it ain't Lampert voodoo driving SHLD's stock price.And he knows to seperate stock and business.
Just as nofs mentioned though I wouldn't be surprised if Lampert and friends are benefiting directly and indirectly.What's to say some of hedge fund pals or subsidiaries and affiliates aren't shorting the stock as well.Remember there are about a half dozen entities that make-up ESL/RBS. ?-Do big institutional investors have to file shorted stock holdings with the SEC-as far as I know only OWNership. If they don't and one of ESL's entities is shorting Sears stock wouldn't that be a conflict of interest? And as far as this take private stuff everyone seems to forget that the reason Eddie/ESL burrow into a company via stock is to lessen financial and legal responsibility by the indirect ownership of stock. |
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Joined: 09 Feb 2008
Posts: 1292
Location: Brand Central
| Posted: Wed Aug 13, 2008 5:00 pm Post subject: | |
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Ya know
In February I made a similar observation on Ed tanking the stock on purpose http://www.retail-worker.com/forum/viewtopic.php?t=8677&highlight=private |
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Joined: 11 Apr 2007
Posts: 317
| Posted: Wed Aug 13, 2008 5:02 pm Post subject: | |||||
Honestly, the more I think about it, the more it makes sense. At least the tanking bit. The real question is - once he has absolute control, will he rake in big time and sell everything piece by piece, turn it around to salvage his reputation, or a bit of both? From the trends we've been seeing (such as corporate and managers really pushing store to web, I kinda think it's a combination. I think he's going to take Sears into a majority online. No overhead of brick and mortar, a strong brand name , higher margins, and keep the service (maybe) portion of the business. This way he sells off all the real estate when the economy turns around, rakes it in, then invests it in the online portion of SHC. It seems more and more that this is where consumers are taking their shopping. It could be seen as a massive success, and we all know that perception is the majority of the battle. Possibly. Just a thought. |
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Joined: 08 Jul 2003
Posts: 4780
| Posted: Wed Aug 13, 2008 5:08 pm Post subject: volume | |
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One of the major things with shorted SHLD stock is the VOLUME-over 37 MILLION shares last I checked.
Without institutional investors I don't think that volume would be that high. Eddie could also be benefiting from 'inside' information as to who and when SHLD stock is shorted.He makes several strategicly timed buys or sells and he drive the stock in any direction he wants. I still think he helped 'walk up' the SHLD stock price some how.Probably some well timed buys to keep the upward monmentum. |
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Joined: 06 Jul 2003
Posts: 6727
Location: Central CA
| Posted: Wed Aug 13, 2008 7:31 pm Post subject: | |||||
I don't think the guy is talking about Eddie doing it himself although I certainly wouldn't put it past him if he thought he could keep it in the shadows. I get the impression that Berkowitz may be the one playing the games, especially since he was he one being credited by Sullivan a couple of days ago for "putting the lie" to something that hadn't been said anyway. Or if not he and Fairholme, then one or more of the other major hedge fund player types.
If it isn't Fairholme, I would guess that it's one of the other major hedge fund players. There's also the fact that Eddie's involvement in stock purchases seems to have been limited to company buybacks so far using Sears money. Nothing seems to be accruing to him personally or to either of his two main funds. There's no evidence in the form of filings or other verifiable data that ESL or RBSP have been doing any significant trading in SHLD stock at all, let alone the kind of volume it would take to generate a spike of this size and nature so I don't think it's Eddie. |
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Joined: 28 Apr 2005
Posts: 1634
| Posted: Wed Aug 13, 2008 7:44 pm Post subject: | |||
The market cap as of today is about 12 billion, and Eddie has about 1.4 billion left to play with in SHC. So either he has to tank the stock a whole lot more, or go searching for capital outside of SHC. Now maybe operating within the law is not a major constraint for Eddie, but it is illegal for an officer of a public company to manage according to a secret plan. He can't go to the capital markets and tell them he's only ruining Sears temporarily to get the stock price down. All in all, IMO the "secret plan" theory just gets too complicated. If he knew how to fix Sears, he could just do it, get the cash flowing, and then apply his genius to spending the cash on other companies and building the empire. I suspect he thought Sears was going to be an easy fix, and it just hasn't turned out that way. Last edited by allhandsabandonship on Wed Aug 13, 2008 8:24 pm; edited 1 time in total |
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Joined: 10 Jan 2006
Posts: 307
Location: Was Somewhere in FL, Now In IL
| Posted: Wed Aug 13, 2008 7:47 pm Post subject: | |
| Hmmmm, manipulating the market?? Isn't that against the law?? | |
Joined: 06 Jul 2003
Posts: 6727
Location: Central CA
| Posted: Wed Aug 13, 2008 8:16 pm Post subject: | |||
Some good points MS. At this time, I don't see it working that way for him for several reasons, but definitely food for thought. One of the reasons I see for it not working is that Eddie is always gonna be Eddie, whether we're talking B&M or on line. Just like the real estate market became glutted before he could exercise his great garage sale, the on line market is going to become saturated also. And by the very people who've been eating his lunch in the B&M world. If Eddie runs true to form, he'll simply try the same old crap on line that he's tried in the stores... fewer sales, higher margins per sale... which simply equates to higher prices which is what that trusted name is becoming best known for. The same people who have been providing the RIGHT combinations of price and service in stores will continue to to so on line and at this point there's no reason to believe that Eddie would back down and join them. |
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Joined: 20 Apr 2005
Posts: 1050
| Posted: Wed Aug 13, 2008 11:44 pm Post subject: Re: What's Behind Sears's Sudden Rise? | |||||
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