Eddie Lampert’s ESL Investments just filed a 13D/A with the SEC in regards to Sears Holdings (SHLD)
“This Amendment No. 12 to Schedule 13D (this “Amendment”) relates to shares of common stock, par value $0.01 per share (“Holdings Common Stock”), of Sears Holdings Corporation (“Holdings”). This Amendment No. 12 supplementally amends the Statement on Schedule 13D, as amended, filed by the Reporting Persons (as defined below) by furnishing the information set forth below. Unless set forth below, all previous Items are unchanged. Capitalized terms used herein which are not defined herein have the meanings given to them in the Schedule 13D, as amended, previously filed with the Securities and Exchange Commission.
Based on the most recently disclosed number of outstanding shares of Holdings Common Stock, the Reporting Persons are filing this Amendment to report an increase in their respective current beneficial ownership percentages of Holdings Common Stock, which for certain of the Reporting Persons is 51.9%, resulting from a decrease in the number of outstanding shares of Holdings Common Stock. “
FULL FILING
Disclosure (“none” means no position):Long SHLD
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4 replies on “ESL Files 13D/A in Sears Holdings”
I used to see value in their real estate and brands. However the last 10Q shows this company is now sinking into negative free cash flow with the worst still ahead.
The stock price is being held up by buybacks and a short squeeze.
I think this company is now threading water waiting for the economy to turn or some managerial engineering by Lambert.
First of you, you’ve posted multiple times to Todd’s blog, all anonymously, each time misspelling Eddie’s last name. That’s how we know it’s you – you’re the moron who calls him LAMBERT instead of correctly calling him LAMPERT. Idiot.
Second, the company announced positive free cash flow this quarterly, albeit at a pretty tepid level when a favorable accounting ruling is excluded. Get your facts straight.
Third, yes, the stock is being buoyed by a short squeeze and is probably the reason many other value investors doubled down this past quarter – it’s purely a financial move, not an endorsement of a retail strategy. If you had the chance to make money on a short squeeze, you’d take it and in this case, you were sufficiently warned.
Finally, Mr. LAMPERT has enough patience to continue investing in the business for as long as needed. He has brands and real estate as a hedge, but has shown no interest in pursuing a liquidity strategy. Apparently, you don’t share the same patience; take your short-sell diatribes elsewhere.
Mr dimebill,
Calm down. Are you reading the same 10Q that was released? $563m for “other operating liabilities” may be one off but are real cash payouts/liabilities. Add on capex @$500m/year and you have negative FCF for this Q. However, assume this $563m wasn’t paid out and is one off, operating income is still down over 97% from the comparative Q. Continue the trend and it won’t be pretty.
Listen, grow a set and create a profile, will ya?
Yes, it won’t be pretty if trends continue. The fact remains that the company generates 60-70% of its annual cash flow in the span of 4 mos. – the 4 mos we’re heading towards in the holiday season. The company basically stays afloat the first 3/4 of the year, then puts its foot on the accelerator during the holidays. Doesn’t mean comps and earnings won’t decline to last year yet again, but it will still throw off significant cash flow. I doubt prior trends point to future results at this point.
There is risk here and I stated that previously. But beyond pure fundamentals, you play this stock as a financial short squeeze; value is concentrated with 10 principal investors and there isn’t enough float to cover the shorts. If you were a fund manager, you would have jumped in on these facts alone; get in through December, get out in January taking 25-30% profits, good performance in any market.
Eddie has a hedge – he’s protected against downside performance with brands and real estate – oh, and services as well. Don’t forget that Sears has the largest national service and repair business in the US. So, with those three assets, he has a capitalization strategy assuming the core business doesn’t turn. That’s why he so patient. No reason to hurry.