Sears - A prime example of accumulationI was looking at Sears this winter around 2 cents, it was a simple chart request from someone, and that lead to me following it. I was noticing the .01-.03 range and found this intriguing, even though this might not be the most fundamental play. Then I tried to buy it around .02 but Fidelity wouldn't let me. I'm now seeing how that accumulation range really played out. A little research lead me to this:
Via Benzinga:
The “old” Sears is however in litigation with the “new” Sears, claiming that the new Sears owes an additional $57.5 million to the old Sears from the sale. In addition, a pending lawsuit filed by old Sears in April 2019 alleges that Lampert and his associates siphoned billions of dollars in assets from it as the company descended into bankruptcy.
At best, the future outlook of the old Sears Holdings company is murky. While Lampert maintains that he will turn the new company around, the old Sears Holdings that still has its stock listed on the OTC market as SHLDQ would not participate because the new Sears is currently wholly owned by Lampert.
On the other hand, if the lawsuits filed by the old Sears against Lampert and associates go to trial and win or are settled favorably, then having a stake in SHLDQ stock might make sense to a trader or investor comfortable with the high risk involved.
NFA, DYOR
Sears
Sears update - price action is getting ready to possibly explodeLooking at the pattern again with fresh eyes it looks like price might be coiling up for an explosion to the upside. Sears could be showing repeating fractals where price explodes out of the apex. This would be a very bullish sign for maybe the next 1 to 6 months.
Sears - price action shows channel wants to break outLooking at Sears it appears price is moving in a channel. Seeing some nice green wick candles indicates to me that buyers are stepping in.
Could see another drop towards the bottom of the channel, otherwise it could be a good high probability setup to wait for impulse above the channel, then correction (bull flag), and then continuation above the price for bullish setup.
$SHLDQ Soars to New Highs as it Gears up for a Massive RecoveryOne thing is known. SHLDQ Chairman Eddie Lampert and his Hedge Fund ESL held commons, and therefore voting rights. Owning 70%+/- is more than huge, no one could take over the company without their say so. To say that commons will not survive is somewhat ludicrous. Why would Lampert cut his own throat? Commons have voting rights and thus, he controls the company’s actions win or lose.
So, bottom-line:
1) Commons are safe.
a. They will be exchanged for NEWCO shares
b. Should be on a 1-1 ratio, but who knows
2) 375+/- stores will be liquidated to pay down debt.
3) 425 Surviving stores will make up the “New” Sears
4) June POR to be released
5) Debtors will be paid as assets are sold off and revenue comes in
This is jmho and how I see things evolving. Sure there can be and will be changes going along the way, but again, the hard part is done…Lampert and ESL survived the biggest holocaust they ever faced.
6) A Hedge Fund, Fairholme, owned by Bruce Berkowitz holds mount beneficially owned:
Fairholme Capital Management, L.L.C.: 3,900,408 (3.6%)
Bruce R. Berkowitz: 4,578,440 (4.2%)
Fairholme Funds, Inc.: 2,774,489(2.5%)
www.otcmarkets.com
Other institutional shareholders:
www.morningstar.com
There are about 30 million public float.
Here is a comparison study between WMI and SHC Bankruptcies:
1. Both Companies have hired Weil, Gotshal & Manges - experts in protecting the NOLs/ Tax Attributes and in Reorganizations.
2. Both Companies sold substantially all of their Assets in Bankruptcy. WMI sold its Bank WAMU to JPM and SHC just sold all of its Operating Stores to ESL.
3. Both Companies have/had significant NOLs. WMI had $ 7.5 B in NOLs and as of Feb 3, 2018 SHC had $ 5 B in NOLs with an additional $ 1.9 B in Losses in the 9 months following Feb 3, 2018. That would be $ 6.9 B in NOLs as of Nov 3, 2018.
4. In the WMI Bankruptcy over 90 % of the reorganized Common Stock were issued to the Preferred and Common Shareholders. After WMI was emerged from Bankruptcy as WMIH with the limited remaining Assets, the WMIH Stock traded in the .50 range and then eventually increased to about $4.00
5. $WMIH was eventually merged with $COOP to utilize $ 6 B in NOLs which is trading at $14.70
6. It is my opinion that it was the $ 7.5 B in NOLs that saved the WMI Preferred and Commons. And I think that the same event could happen with the SHLDQ Commons.
$SHLDQ Major Future Dates Predictions and TakeAways TP $4.50I have taken a large position on Sears going into the Sale hearing on Feb 1st after a revised bid was submitted today for $5 Bil, giving it a valuation almost 100x the current Market Cap. I do believe the stock should more than likely do at the very least 3x the current PPS and at the very most 9x the current PPS going into the Sale Hearing.
Here's some info I found on another case for Lampert which makes a very valid point:
"$GGP the same scenario happened there many were against Lampert debtors and creditors and was fought legally, the judge eventually sided with Lampert and the offer was accepted commons were not wiped out and many who held made tons of money selling at $29 bucks from a position of .65 cents
The price started to go up slowly before the offer acceptance and once it was accepted we got to $2 dollars and by the time they got out of bankruptcy it started to move and in less that two years or so I cannot remember exactly we were in mid twenties lots of money was made.
I repeat not once in legal disclosures or security filings has sears ever mentioned anything about commons being cancelled.
There is always a disclosure when companies file for bankruptcy, they disclose this very clearly that they do not expect commons to survive. Why then are insiders still holding their common shares?"
Insider Ownership:
ESL Partners, L.P.
156,380,740 (1)(2) 73.4 % (3)
JPP II, LLC
65,015,615 (4)(5) 37.3 % (6)
SPE I Partners, LP
150,124 0.1 %
SPE Master I, LP
193,341 0.2 %
RBS Partners, L.P.
156,724,205 (1)(7) 73.6 % (3)
ESL Investments, Inc.
156,724,205 (1)(7) 73.6 % (3)
JPP, LLC
44,629,752 (5) 29.0 % (8)
Edward S. Lampert
156,724,205 (1)(7) 73.6 % (3)
Important Future Dates:
• January 11, 2019 (10:00 a.m.): Hearing on Stalking Horse Designation Objections and on objections to the qualification of any Credit Bid by affiliate or insider, if necessary.
• January 14, 2019 (10:00 a.m.): Auction held at Weil offices, if necessary.
• January 16, 2019: Target date for debtors to file with the Bankruptcy Court the Notice of Auction Results and to provide the applicable Counterparty with Adequate Assurance Information for the Successful Bidder (if different than the Stalking Horse Bidder)
• The later of (i) January 24, 2019 and (ii) eight days of filing of the Notice of Auction Results and Service of the Adequate Assurance Information: Deadline to object to (i) the proposed Sale Transaction for a Successful Bidder (including a Stalking Horse Bidder), (ii) Debtors’ proposed Cure Costs for Proposed Assumed Contracts not included in any Stalking Horse Bid, (iii) the assumption of and assignment to a Successful Bidder that is not a Stalking Horse Bidder of any Proposed Assumed Contracts or any Contracts or Leases that may later be designated by such Successful Bidder for assumption and assignment, and (iv) conduct of the Auction
• January 29, 2019 (4:00 p.m.) or two days prior to the Hearing Date: Debtors’ deadline to reply to Sale Objections
• February 1, 2019 (10:00 a.m.): Sale Hearing
Sears is a 126 year old corporation and the pioneer of many things we have today in retail. I do believe the company and commons will be saved either through Lampert or a buyout from another organization, maybe one of the many insiders who still have a majority stake in the company where they can offset the price of buying it out with the dramatic increase of the PPS from this level.
I am Mid to Long term depending on how the PPS plays out and the price.
a Clear short IMOSears has failed people and its investors. Its a matter of time till this ship sinks.
$SHLD A Downside Opportunity You Don't Want To MissJust like many of the Texas Shale oil companies during the oil downturn with massive debt, Sears is what we're calling "Walking Dead" of the retail industry. The recent rally of price has likely come from many of the shorts closing their positions at large profits, and the huge drop has come from professional and retail traders alike identifying an opportunity to ride the price downward.
This stock is the definition of high risk on either side, so the best play is a long term option spread; enter the December strikes.
If you missed the last week's signal, then have no fear. As of now, if you were to sell the December $11/12 call spread, you have a 70% chance of making 30% Return on Investment/Risk (ROI/ROR) for 8 months of waiting. That's pretty good odds and not a bad return for less than a year's work.
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Death Slide - Lack of innovation?This is what happens when there is no culture of innovation, a slow death slide. This is the MONTHLY chart of Sears -- who at one time was the nation's largest retailer during my grandparents generation.
Now they are forced to sell off their primary assets to buy more time to try to stay on life support.
$SHLD never recovered from their May 2007 high, 10 years later, stock is down almost 96%... ouch!
Revenue: 23.39B
Net Income: -2.194B
Book value: -31.59 (that's less than zero)
2 month short re did a few down trend lines , looks like we hit my new down trend line
i did not do my usual fall Put due to the high cost of PUTs this year ]
Lamberts fund seems to buy every time this dog gets low
I see the problem that shopping malls are going bust still as people buy on line and do not see how sears can rent these out for profit when they could not make profit !
1st target 31.27 , trailing stop until then
2nd target 29 ,, 31.40 stop loss
3rd target , 27.32 will take 1/2 off , back to trailing stop
will exit 1st week of May to stop time decay
quick ref from yahoo financials
1 st may 37 P @ 1.59 , 39 P@ 2.2
19th June 37 P @ 3.6 , 39P @ 4.8
