A city boy, Eddie, moved to the country and bought a donkey from an old farmer for $100. The farmer agreed to deliver the donkey the next day. The next day the farmer drove up and said: “Sorry son, but I have some bad news. The donkey died.” Eddie replied, “Well then, just give me my money back.” The farmer said, “Can’t do that. I went and spent it already.” Eddie said, “OK, then just unload the donkey.” The farmer asked, “What ya gonna do with him?” Eddie: “I’m going to raffle him off.” Farmer: “You can’t raffle off a dead donkey!” Eddie: “Sure I can. Watch me. I just won’t tell anybody he is dead.” A month later the farmer met up with Eddie and asked, “What happened with that dead donkey?” Eddie: “I raffled him off. I sold 500 tickets at $2 a piece and made a profit of $998.00.” Farmer: “Didn’t anyone complain?” Eddie: “Just the guy who won. So I gave him his $2 back.” Eddie grew up and eventually became the chairman of Sears
Rocket sure seems quiet right now.
Not counting the Craftsman deal, Sears lost 400 million last quarter.
Sales plummeted 30% from the previous quarter and 20% Q over Q.
They only have a little more than 200M in cash which is roughly what they go through in a month. Which means unless something changes they have literally days left.
Inventory is way down which sounds good except for the fact that it can't be replaced because Sears has no cash and vendors are pulling out.
Despite massive cost-cutting, costs are actually up on a percentage basis.
The valuation of the stock is 0. Literally 0. I'm not exaggerating. If you think I'm wrong I challenge anyone to show me how it has any value at all.
Liabilities are 1.4x assets (which is really bad) and on top of that assets declined 19% over the last year.
Sears has all of their hopes on a single auto center in San Antonio, the Shop Your Way points and beating Amazon for online sales.
Unless something drastic changes there is no way Sears can avoid bankruptcy in the very near future.
Even if somehow Eddie pulls something out of his rear end (which if you're betting on that you have better odds in the lottery), the stock is still going to spend 4-5 years trading in the 25-50 cent range before the turnaround happens.
There is absolutely no reason to buy this stock.
Obvious Facts: Eddie is propping up Sears Soley to avoid fraudulent conveyance on spinoffs and asset sales and mostly to prop up Seritage by using current SHLD asset sales to Pay SRG rent, capex, and taxes that it cant afford.
Clearly, Eddie Lampert is breaking his fiduciary duty to outside shareholders, outside creditors.
Clearly, unlikeable Eddie is going to go down in history as a big looser.
For entertainment value, you just cant make this stuff up.
When SHLD/Eddie says they will pay down $1.5 billion of debt. What he really means is interest rate rises will reduce pension liability by $500 million. We will temporarily pay down some buckets of debt by $1billion. Thus $1.5 billion but we will then raise $1.2 billion from other baskets of debt.
What a misleading fraudster. All the while selling the few remaining assets to pay SRG "rent, taxes, and capex" at the expense of SHLD outside shareholders and creditors.
Bruce and Eddie know the history books will not be kind to them. But they are creepy anyway so who cares.
Enjoy the entertainment.
Rocket will you shut the #$%$ UP!How many thumbs up clicks can I get for that!
What is the Sears business model here? How in the world do we think it is sustainable in today's era? So thinking logically as an investor, why would I purchase this stock?
I think I'm going to write a book about Sears. I don't want to give away too much, but It's going to end in Chapter 7.
Back to reality today.
Sears reducing long term debt is a total Mirage! Eddie is a total criminal fraudster.
He payed down $430million long term debt buy borrowing "$551 million short term"
He is a total loser! He has wasted the last 15 years of his life and will waste the next 10 years of his life. What a total idiot! He doesnt just look like a creep, he is a creep.
Getting tougher for the smoke and mirror show to continue when they're running out of money to burn to make the smoke.
Where are the folks with $200 predictions?
This stubborn stock will just not drop under $7
SHLD will have to sell more assets in the next 30 days .. look for something to go.
Tomorrow's pre-recorded earnings report is best explained by these two bar patrons:
Two Enron auditors walk into a bar. The bartender asks them if capitalism failed Sears or Sears failed capitalism. First auditor says, "Capitalism is when you have two cows. You sell one cow and buy a bull. Your herd multiplies and the economy grows. You sell the herd and retire on the income." Second auditor says, "Sears capitalism is when you have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank. You then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. You then transfer the milk rights of six cows via an intermediary to a Cayman Island company secretly owned by the majority shareholder of your publicly listed company who sells the rights to all seven cows back to your publicly listed company. The Annual Report to Shareholders says the company owns eight cows, with an option on one more.
Contest for best SHLD theme song. My nomination: Knock Knock Knocking on Heaven's door.
The day after a drug induced high -- you get a hangover.
$41 in debt per share, $2.6 in cash per share. How is this not in bankruptcy yet????
They are not going to be able to borrow against their long term credit facility (only $70 mill available) with rapidly declining levels of inventory only way to keep this afloat is to sell everything remaining that is unencumbered. Need to sell around $700-800 million just to maintain current cash balance through the end of the quarter.
Same store sales -12% percent! Sorry but the media has nothing to do with it Eddie. Eddie face it, the shareholders don't own this company any more. The note holders own this company. Maybe you can buy the bonds at 40 cents on the dollar and do it all over again.