Why is SHLD worth *more* now that they're to cash in by selling (into a weak market) properties they've had for years and, presumably, been properly evaluated by all the covering analysts?
Seems like to me that their *earnings* report is horrible. Makes no sense.
What you just saw on this price spike today at noon was margin departments forced covering on failure to deliver stock.
Who in their right mind would buy this stock after the earnings report. This patient is bleeding. Fast Eddie was able to temporarily breathe new life into this dying patient with a fool hardy plan of liquidating assets.
Wait until bond holders start screaming fraudulent transfer of assets. Eddie has always said that this is an undervalued asset story. However, real estate values have declined along with earnings. Eddie can manage a hedge fund but running a large retailer is completely different.
““The market went ballistic, this huge number seemed to validate the theory that there was a lot of value to unlock if one looked at Sears as some kind of liquidating trust, selling real estate left and right. After all, we were just talking about 11 stores, and they seemed to be flying at $27 million a pop -- this included leased stores. Twenty seven million dollars and Sears had literally thousands of other stores to sell (nevermind the rest of the 100-120 underperforming ones).
But, as with other fairy tale stories, reality reasserts itself sooner or later. In this case reality, was reestablished by GGP gloating that one of the properties was in its most profitable mall and Sandler O'Neill analysts saying that this particular store fetched $250 million of the $270 million total.
So … on one hand, Sears is not just dropping underperforming stores; it actually seems to have sold one of the crown jewels. You certainly don't turn around a retailer by selling the most profitable stores, even if you delay its closing by two years. On the other hand, excluding this profitable asset, the other 10 stores were sold for a measly average of just $2 million, sinking any idea that selling stores was the way to riches.
Also, Sears' lenders, namely those financing Sears' "Amended Domestic Credit Agreement" can't be too happy to see Sears selling and spinning off profitable assets, as what will remain under SHLD will be increasingly challenged to service borrowings.””
This retailer has been a dead man walking for some time, the quicker you monetize the retail assets, even taking a beating on the real estate, the better it is. The Sears stores continue to lose money - the quicker you stop the bleeding, the better it is for the shareholders.