Author Topic: SHLDQ - Sears Holdings Corp  (Read 2625306 times)

Greyhound

  • Newbie
  • *
  • Posts: 31
  • https://twitter.com/GreyhoundValue
Re: SHLDQ - Sears Holdings Corp
« Reply #9160 on: May 29, 2018, 05:50:45 PM »
Quote
We wanted to emphasize that finding an appropriate partner soon will be a critical factor that will materially impact any definitive proposal that we are able to make. Specifically, we believe that our ability to execute the ESL Proposal depends on our ability to engage with partners that can provide strategic and/or management experience to these businesses.


walt373

  • Full Member
  • ***
  • Posts: 128
Re: SHLDQ - Sears Holdings Corp
« Reply #9161 on: May 30, 2018, 11:54:36 AM »
Have we considered the possibility that Eddie was willing to continually do seemingly uneconomic deals with SHLD so that he could profit by selling CDSs that he could make sure would not pay out?

https://www.bloomberg.com/news/articles/2018-05-22/sears-looks-like-the-next-company-with-head-scratching-cds-trade

benhacker

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 866
Re: SHLDQ - Sears Holdings Corp
« Reply #9162 on: May 30, 2018, 12:35:18 PM »
:)

Quote
Have we considered the possibility that Eddie was willing to continually do seemingly uneconomic deals with SHLD so that he could profit by selling CDSs that he could make sure would not pay out?

https://www.bloomberg.com/news/articles/2018-05-22/sears-looks-like-the-next-company-with-head-scratching-cds-trade

Thesis for first 10 years was Eddie was going to "screw" debtholders by hiving off all the good assets.

Now Eddie is long CDS (basically a debtholder) so he's screwing equity to enhance his trade.

Maybe it's just:
1) company had tons of assets so NAV was higher than anyone believed (except Eddie and a few others)
2) he's not that good at running retail so he obliterated much of the margin of safety

And that's pretty much it. :)

Half joking... I don't know about the CDS angle, but as a former (long suffering and long voiced creditor) debt holder, just thought the comment/suggestion was amusing.
Ben Hacker
Beaverton, Oregon - USA

TwoCitiesCapital

  • Hero Member
  • *****
  • Posts: 2027
Re: SHLDQ - Sears Holdings Corp
« Reply #9163 on: May 30, 2018, 04:11:48 PM »
Have we considered the possibility that Eddie was willing to continually do seemingly uneconomic deals with SHLD so that he could profit by selling CDSs that he could make sure would not pay out?

https://www.bloomberg.com/news/articles/2018-05-22/sears-looks-like-the-next-company-with-head-scratching-cds-trade

Quote
"Those bonds have been the lowest-priced of the unitís debt. A buyer of credit derivatives profits from the difference between the face value of a companyís debt and its cheapest bonds, so eliminating low-priced debt decreases the potential payouts for the buyer and gives a higher return to the seller."

Aren't CDS all cash settled now via auction? The return to the CDS seller is the spread/coupon paid for the protection less any amount owed in a default. Since physical bonds aren't used for settlement anymore, isn't statement a bit dated?

BeerBBQ

  • Full Member
  • ***
  • Posts: 133
Re: SHLDQ - Sears Holdings Corp
« Reply #9164 on: June 05, 2018, 12:42:17 PM »
Anyone have any thoughts on the 2019 unsecured debt?

With today's 8-k, it looks like $4b out of the $5B in outstanding debt now matures on 7/20/20.  Of the $1B that matures before then, I think ESL owns $400m of it.  Also, roughly $134m is due 10/15/18 with the rest due in 2019.  With the impending potential purchase/cash infusion from ESL for Kenmore, Home Services, Real Estate, etc., shouldn't the 2019 debt have a much better chance of being paid than what is implied by current price?

Also, it seems curious that the maturity extensions for various debts over the past few years seem to all have land on 7/20/20.   



doughishere

  • Hero Member
  • *****
  • Posts: 1367
Re: SHLDQ - Sears Holdings Corp
« Reply #9165 on: July 24, 2018, 07:59:02 AM »
Whirlpool down 15% on higher input costs.  Dont they make appliances for Kenmore?

https://money.cnn.com/2018/07/24/news/companies/whirlpool-washing-machines-trump-tariffs/index.html


"The global steel costs have risen substantially, and in particular, in the US, they have reached unexplainable levels," Bitzer told analysts. "Uncertainty" around additional tariffs and global trade had disrupted Whirlpool's supply chain, he said.


Spekulatius

  • Hero Member
  • *****
  • Posts: 1967
Re: SHLDQ - Sears Holdings Corp
« Reply #9166 on: July 24, 2018, 08:44:31 AM »
Whirlpool down 15% on higher input costs.  Dont they make appliances for Kenmore?

https://money.cnn.com/2018/07/24/news/companies/whirlpool-washing-machines-trump-tariffs/index.html


"The global steel costs have risen substantially, and in particular, in the US, they have reached unexplainable levels," Bitzer told analysts. "Uncertainty" around additional tariffs and global trade had disrupted Whirlpool's supply chain, he said.

It would be helpful if there were announcements of capacity increases for steel, but so far I have not seen any. I am guessing the management of the steel companies are just happy to cash in the windfall from the higher prices and leaves it at that. Steel prices in the US are now way higher than in the rest of the world, so everyone else who is using steel will eat the margin hit, or lay it off to the consumer.

I canít blame steel execs either, given the instability it would be risky to make plans for 3 years out and build a new foundry.
To be a realist, one has to believe in miracles.

doughishere

  • Hero Member
  • *****
  • Posts: 1367
Re: SHLDQ - Sears Holdings Corp
« Reply #9167 on: July 24, 2018, 08:52:34 AM »
Whirlpool down 15% on higher input costs.  Dont they make appliances for Kenmore?

https://money.cnn.com/2018/07/24/news/companies/whirlpool-washing-machines-trump-tariffs/index.html


"The global steel costs have risen substantially, and in particular, in the US, they have reached unexplainable levels," Bitzer told analysts. "Uncertainty" around additional tariffs and global trade had disrupted Whirlpool's supply chain, he said.


It would be helpful if there were announcements of capacity increases for steel, but so far I have not seen any. I am guessing the management of the steel companies are just happy to cash in the windfall from the higher prices and leaves it at that. Steel prices in the US are now way higher than in the rest of the world, so everyone else who is using steel will eat the margin hit, or lay it off to the consumer.

I canít blame steel execs either, given the instability it would be risky to make plans for 3 years out and build a new foundry.

Canít be good for the Kenmore valuation. Too bad Eddie didnít close a few months ago.

CEO of whirlpool

Quote
"As you can tell from our remarks and from the munbers. we had a very strong pricing progress year-over-year and
sequentially and we also going into the promotion period around July 4. We decided to stand firmm in our pricing pieces
and we executed accordingly. Obviously. I cannot comment on what competitors are doing or not doing. That's their
decision. We've seen over July 4 period that not everybody sticking to consumer price increases but again. that's normal
promotion environment and I'm not readmg too much into this. Again. I can only reaffirm We are standing fnm in mm
price increases and because we are committed it's the only right thing to do with such a cost inflation environment.

   

« Last Edit: July 24, 2018, 08:57:10 AM by doughishere »

Spekulatius

  • Hero Member
  • *****
  • Posts: 1967
Re: SHLDQ - Sears Holdings Corp
« Reply #9168 on: July 24, 2018, 10:02:27 AM »
I bought a Maytag dishwasher early this year for $450 early this year that now quotes for $580. Thatís what winning a trade war looks like. Yay!
To be a realist, one has to believe in miracles.

rkbabang

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3918
Re: SHLDQ - Sears Holdings Corp
« Reply #9169 on: July 24, 2018, 10:32:14 AM »
I bought a Maytag dishwasher early this year for $450 early this year that now quotes for $580. Thatís what winning a trade war looks like. Yay!

"Strange game. The only way to win is not to play."