Author Topic: SHLD - Sears  (Read 2562914 times)

voyager

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Re: SHLD - Sears
« Reply #9150 on: April 27, 2018, 02:59:40 PM »
Hey guys quick question from someone who hasn't studied Sears before. 

Have you seen any good thoughts surrounding the value of Kenmore and Home Services?


Picasso

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Re: SHLD - Sears
« Reply #9151 on: May 21, 2018, 03:48:51 PM »
They just pulled in $400 million for an asset nobody thought had value and not a single comment? My my how sentiment on this board has changed since page 1. Feeling more and more like weíve reached max capitulation (especially with Berkowitz blowing out) and thereís a lot of money to be made here given some of the recent moves to equitize debt as high as the 2Lís.

Spekulatius

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Re: SHLD - Sears
« Reply #9152 on: May 21, 2018, 04:05:31 PM »
They just pulled in $400 million for an asset nobody thought had value and not a single comment? My my how sentiment on this board has changed since page 1. Feeling more and more like we’ve reached max capitulation (especially with Berkowitz blowing out) and there’s a lot of money to be made here given some of the recent moves to equitize debt as high as the 2L’s.

He keeps the  SHLD bonfire burning longer than I would have expected, but that unlikely changes the ultimate outcome. From the looks of it, this is the at least partial sale of the SYW program.
To be a realist, one has to believe in miracles.

sampr01

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Re: SHLD - Sears
« Reply #9153 on: May 21, 2018, 04:32:48 PM »
Hi Picasso,

Thanks for posting and agree with your sentiment. ESL buying whole or part of home services?. I am in sears debt for last couple of years and keep on rolling from 2017 to 2018 and 2019. I am too scared to invest in common based on prior experience with commons.

Thanks
They just pulled in $400 million for an asset nobody thought had value and not a single comment? My my how sentiment on this board has changed since page 1. Feeling more and more like weíve reached max capitulation (especially with Berkowitz blowing out) and thereís a lot of money to be made here given some of the recent moves to equitize debt as high as the 2Lís.
« Last Edit: May 21, 2018, 04:45:14 PM by sampr01 »

sampr01

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Picasso

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Re: SHLD - Sears
« Reply #9155 on: May 21, 2018, 08:30:18 PM »
They just pulled in $400 million for an asset nobody thought had value and not a single comment? My my how sentiment on this board has changed since page 1. Feeling more and more like weíve reached max capitulation (especially with Berkowitz blowing out) and thereís a lot of money to be made here given some of the recent moves to equitize debt as high as the 2Lís.

He keeps the  SHLD bonfire burning longer than I would have expected, but that unlikely changes the ultimate outcome. From the looks of it, this is the at least partial sale of the SYW program.

At the risk of overly simplifying a complex and unknown outcome.. I think something like this needs to be broken down in two parts. First would be understanding different paths of a restructuring (in-court or not) and what that would mean for the equity and debt in the near-term. The market and balance sheet values diverged pretty significantly due to Berkowitz liquidations which opened up options for ESL to maybe create value for the equity to the detriment of bond holders. It was telling that Berkowitz did not exchange his notes. With so much debt trading at half of par and various transactions that included significant conversion of debt to equity you can pencil out some interesting outcomes that are probable given Lampert's background and recent actions. What happens after this restructuring is anyone's guess but there's not much point in focusing on their inevitable demise when they're in the middle of significantly reducing liabilities that the market thinks would make this a zero...  When these transactions are all said and done it will be easier to figure out whether they were for nothing and the retail operations will continue bleeding enough to kill the rest of the business. I don't know what the odds are on stabilizing the retail ops but if you can pay a $200 million stub (I guess closer to $400 million today without accounting for potential dilution) with at least a couple billion coming in while reducing net debt by taking advantage of the bond conditions there are probably much better than 50/50 odds of doing well here in the short-term. The upside on stabilizing the retail ops is so large that even small odds of success there makes this more interesting because you're likely to make money on the first leg of this trade (buying during distress with Berkowitz liquidations and the debt restructuring) with a free look at what comps start looking like later this year. If they turn positive for some reason I imagine this sucker will really fly but at least I don't have to worry about paying up for that like everyone else at $30-40+/share.

I think if someone looked at this with fresh eyes and took away any bias the reception would be a lot different.  Just look at all the interviews Lampert has done recently. He's 1) opened himself up to fradulent conveyence risk once again, and 2) specifically said he does not think a bankruptcy is in the cards anytime soon. Doesn't seem like a bad time to bet against consensus.

BargainValueHunter

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Re: SHLD - Sears
« Reply #9156 on: May 22, 2018, 06:24:09 AM »
A question for those of you who are still bullish on Sears Holdings...

Lampert has made dozens of moves over the last 8 years that have freed up capital or injected capital into the operating cash flow but the burning of that cash has continued unabated. There are no signs that cash burn will become less of a problem in the future.

What does it matter if cash is being unlocked when operations will certainly burn the cash before anything resembling a profit is generated?
Albert Einstein called compound interest "the greatest mathematical discovery of all time".

walt373

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Re: SHLD - Sears
« Reply #9157 on: May 22, 2018, 08:24:44 AM »
Will they turn the retail operation around or can they shrink down to a profitable core business? Until that's done, everything else is just buying time.

DTEJD1997

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Re: SHLD - Sears
« Reply #9158 on: May 22, 2018, 08:43:20 AM »
Will they turn the retail operation around or can they shrink down to a profitable core business? Until that's done, everything else is just buying time.

Yes, Sears is pretty much done in my area of the country.

I can not think of an open Kmart anywhere within driving distance.

There are a couple of Sears...but I don't shop there.  I don't know of anybody else that regularly goes to a Sears.

What happens if Sears gets things turned around, but they only have 150 stores at that point?

I think the time for a retail turnaround came and went a long time ago.

doughishere

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Re: SHLD - Sears
« Reply #9159 on: May 29, 2018, 05:48:54 PM »
https://www.sec.gov/Archives/edgar/data/923727/000119312518175601/d594357dex9967.htm

"there has been a significant increase in the market price of Searsí unsecured debt that could make the contemplated exchange of debt for equity and debt repurchases less attractive"

did eddie not think this one through?