SHLDQ - Sears Holdings Corp

[bobp]

I searched for Credit Suisse and Sears and this came up. Took me a minute to realize it was from 2007. The stock was around $110. It's the same analyst and it sounds like he was pretty much right in 2007.

 

Credit Suisse Analyst's Faulty Sears Holdings Analysis

http://seekingalpha.com/article/56260-credit-suisse-analysts-faulty-sears-holdings-analysis

 

I think attacking CS is unfair. You had Baker, a long, obviously pumping the stock and their position, and CS responded. They cover the stock. That's what they do. And they may be right.

 

And if nothing real happens to sustain this move, remember that Sears will once again be putting out terrible sales numbers for the holiday season because their stores are awful and the website is worse. I hope you all are right and you make a million on this - make that ten million I forgot who I'm dealing with here - but I could see this coming right back down again.

 

 

 

[Matson125]

A Rebuttal to the WSJ Piece

 

http://seekingalpha.com/article/1691102-the-wsjs-bad-math-on-sears?source=email_rt_article_readmore

[CorpRaider]

I can't imagine a sell side analyst recommending to short a stock with these float mechanics.  ESL could tender and then you might be looking at lawsuits enough for a Blodget.  I mean I could see rating it a "sell", but anything beyond that is just odd.

[Guest wellmont]

I can't imagine a sell side analyst recommending to short a stock with these float mechanics.  ESL could tender and then you might be looking at lawsuits enough for a Blodget.  I mean I could see rating it a "sell", but anything beyond that is just odd.

 

isn't he rating it sell? anyway robert wilson got clocked shorting Resort's International. Documented in the Money Masters. A broker gave him the idea. But Wilson took full responsibility for the gaffe.

[BTShine]

Did anyone notice that they forgot an S at the end of Sears Holding in the CS report title?

[warrior]

Have you considered risks in lending shares from your account? Do brokers (Schwab, TDAm,...) guarantee safety in getting back those shares? What happens to your shares if the party to whom your shares were lent defaults (go broke!)?

 

I vaguely remember (during 2008 crisis, I think) Charlie Munger recommended NOT to have your shares in margin account.

Im not kidding ,lending rate is 4000bp.,I do not recall I saw the rate like this in the last 5yrs or so .

People who are short must be crying.

 

 

That is an interesting question. I don't know the answer. Will the broker be responsible then?

 

I have no idea how it works at the retail level, but at the institutional level, absent an agreement to the contrary and/or some collateral or other arrangement, if the securities borrower fails to return the shares the lender is SOL and would need to litigate to get some kind of restitution.  Likely if someone just doesn't return the shares it's because they are going under and one would be an unsecured creditor of the bankruptcy estate.  But as I said, no clue how it works in retail land.  I have to believe that as part of the agreement with the broker one lends at their own risk.  It would behoove someone doing this to check their underlying documentation and/or speak to their lawyer.

we use cash collateral  105% mark to market daily. Im comfortable with that.

The practice in industry    102% cash collateral an up .

Im not sure about retail , I would guess that  it should be somewhere  the same, I would assume that  prime broker would use  at least 100% cash collateral,

I would suggest checking disclosure with prime broker.

 

Today SHLD

1day -2143 bp

7 days -2116bp

30 days -1637bp

Utilisation almost 99%, indeed it is hard to come by with shares, at the present capacity is limited.

Short sellers, in addition  paying high fees, if selling dividend-paying stocks dividend reimbursement.

 

To give some perspectives to lend BRK,

1 day 4pb

7 days 5bp

30 days 5 bp

 

Utilisation 0.25%

 

I guess you can feel the difference :)

[warrior]

Im not kidding ,lending rate is 4000bp.,I do not recall I saw the rate like this in the last 5yrs or so .

People who are short must be crying.

 

 

[Sunrider]

Im not kidding ,lending rate is 4000bp.,I do not recall I saw the rate like this in the last 5yrs or so .

People who are short must be crying.

 

I'm wondering if I'm getting the right results on IB's SLB tool - seeing 0 shares available but not having the little symbol on the workstation next to shld that indicates it's hard to borrow. I'm in their automatic yield enhancement programme. Could someone who isn't perhaps confirm that IB indeed shows no shares available?

 

Cheers!

C.

[warrior]

Im not kidding ,lending rate is 4000bp.,I do not recall I saw the rate like this in the last 5yrs or so .

People who are short must be crying.

 

I'm wondering if I'm getting the right results on IB's SLB tool - seeing 0 shares available but not having the little symbol on the workstation next to shld that indicates it's hard to borrow. I'm in their automatic yield enhancement programme. Could someone who isn't perhaps confirm that IB indeed shows no shares available?

 

Cheers!

C.

Im not kidding ,lending rate is 4000bp.,I do not recall I saw the rate like this in the last 5yrs or so .

People who are short must be crying.

 

I'm wondering if I'm getting the right results on IB's SLB tool - seeing 0 shares available but not having the little symbol on the workstation next to shld that indicates it's hard to borrow. I'm in their automatic yield enhancement programme. Could someone who isn't perhaps confirm that IB indeed shows no shares available?

 

Cheers!

C.

I would guess that IB use Transaction explorer(TE) -system , as other big guys . where utilization rate is 99%.

[MYDemaray]

Confirmed, IB showing no shares, and became unavailable on Sep 7. See attachment.

[muscleman]

I just called my broker Fidelity today. They also have a lending program. They said the current rate for SHLD is 45%. They will give me 5%, and they make 40%, if I agree to lend the shares. I told them that is fucking ridiculous.  >:(

 

I am thinking about transferring the shares to IB, but tax reporting would be a pain each year. Do you know any risks involved in lending out the shares? If the short seller goes broker and couldn't buy back my shares, will my broker be held responsible to buy back the shares and return for me?

[alertmeipp]

I just called my broker Fidelity today. They also have a lending program. They said the current rate for SHLD is 45%. They will give me 5%, and they make 40%, if I agree to lend the shares. I told them that is fucking ridiculous.  >:(

 

I am thinking about transferring the shares to IB, but tax reporting would be a pain each year. Do you know any risks involved in lending out the shares? If the short seller goes broker and couldn't buy back my shares, will my broker be held responsible to buy back the shares and return for me?

 

I heard some brokers lend your shares out without consent if you have a margin account.

[ERICOPOLY]

Painful.  I commented earlier that it regularly rallies to at least $60 every time.  Dammit.

[krazeenyc]

Took 25% off the table today at an avg price of 60.  On the one hand I still think it's undervalued and that the ongoing squeeze can rocket the stock higher in short order. On the other hand , we're up more than 50% since Aug 26 on absolutely no news.  It's so hard maintain your resolve to hold on when a stock rockets higher like this (especially when it's not news/event driven).

[CorpRaider]

Credit Swizzzzzzzzzzzzzz!

[Parsad]

Took 25% off the table today at an avg price of 60.  On the one hand I still think it's undervalued and that the ongoing squeeze can rocket the stock higher in short order. On the other hand , we're up more than 50% since Aug 26 on absolutely no news.  It's so hard maintain your resolve to hold on when a stock rockets higher like this (especially when it's not news/event driven).

 

Better safe than sorry!  You can look like a cautious hero, or a foolish zero...which would you rather be?  Cheers!

[BTShine]

Took 25% off the table today at an avg price of 60.  On the one hand I still think it's undervalued and that the ongoing squeeze can rocket the stock higher in short order. On the other hand , we're up more than 50% since Aug 26 on absolutely no news.  It's so hard maintain your resolve to hold on when a stock rockets higher like this (especially when it's not news/event driven).

 

Congrats! 

 

I bought back some ~$50 puts today.  Sold them for a premium of $25 a year ago and bought them back for around $7.50 today.  Still have a significant amount of capital in SHLD.  Today's transaction only reduced my position by about 10%. 

 

 

[Hielko]

I just called my broker Fidelity today. They also have a lending program. They said the current rate for SHLD is 45%. They will give me 5%, and they make 40%, if I agree to lend the shares. I told them that is fucking ridiculous.  >:(

 

I am thinking about transferring the shares to IB, but tax reporting would be a pain each year. Do you know any risks involved in lending out the shares? If the short seller goes broker and couldn't buy back my shares, will my broker be held responsible to buy back the shares and return for me?

The easiest way for a retail account to capture the lending fee is to create a synthetic long position using options.

[muscleman]

Took 25% off the table today at an avg price of 60.  On the one hand I still think it's undervalued and that the ongoing squeeze can rocket the stock higher in short order. On the other hand , we're up more than 50% since Aug 26 on absolutely no news.  It's so hard maintain your resolve to hold on when a stock rockets higher like this (especially when it's not news/event driven).

 

I am not selling a single share. It is amazing that the loan rate jumped from 15% to 42% in just one week. I would be very interested to hold on and see where the price goes next. The big boys are probably not buying at current price, but are not selling either. If price stays the same, short sellers will be impatient and cover slowly. So I think as long as there is no news, the tendency is up.

[Parsad]

Took 25% off the table today at an avg price of 60.  On the one hand I still think it's undervalued and that the ongoing squeeze can rocket the stock higher in short order. On the other hand , we're up more than 50% since Aug 26 on absolutely no news.  It's so hard maintain your resolve to hold on when a stock rockets higher like this (especially when it's not news/event driven).

 

I am not selling a single share. It is amazing that the loan rate jumped from 15% to 42% in just one week. I would be very interested to hold on and see where the price goes next. The big boys are probably not buying at current price, but are not selling either. If price stays the same, short sellers will be impatient and cover slowly. So I think as long as there is no news, the tendency is up.

 

It has been so far.  Numbers wise, it is one of the biggest squeezes you will see based on shares short and actual available float.  It's the main reason we jumped in with the LEAPs.  This movement has been happening with no news other than an analyst report.  Can you imagine what will happen if Sears actually makes some progress in a quarter?  It's even much tighter than the Overstock squeeze, so any good news and this thing could prove to be a nightmare for the shorts.  Cheers!

[Luke 532]

If price stays the same, short sellers will be impatient and cover slowly. So I think as long as there is no news, the tendency is up.

 

It has been so far.  Numbers wise, it is one of the biggest squeezes you will see based on shares short and actual available float.  It's the main reason we jumped in with the LEAPs.  This movement has been happening with no news other than an analyst report.  Can you imagine what will happen if Sears actually makes some progress in a quarter?  It's even much tighter than the Overstock squeeze, so any good news and this thing could prove to be a nightmare for the shorts.  Cheers!

 

This is the exact reason why I've believed the short interest discussion has been relevant for this message board (as well as Lampert and Berkowitz increasing their ownership concentration).  Not sure if others still believe it's an irrelevant topic.  Obviously short interest is not part of the investment thesis, but when a phenomenon is likely to happen it is important to at least discuss and monitor.

[Buckeye]

I got to hand it to you Luke.  You showed up with a flurry of posts and an extremely bullish thesis at what looks to be a short term bottom.  I know that the market doesn't confirm whether you are right or wrong, but you took a bunch of heat from a group of posters who claimed the conversation was a complete distraction to a value investor board, and lacked proper analysis. 

 

Then, Baker Street releases a detailed analysis, with many of the same points you were trying to make and everyone takes notice.

 

Again, I know that you shouldn't look to market to determine whether you were right or wrong and anything can happen from here.  But, I thought you deserve a hat tip!  Like Buffett says about stock tips, you are either right and no one gives you credit or you are wrong and no one will let you forget it.

 

Thank you for your contribution to the board.

 

Buckeye

[ourkid8]

+1

 

I got to hand it to you Luke.  You showed up with a flurry of posts and an extremely bullish thesis at what looks to be a short term bottom.  I know that the market doesn't confirm whether you are right or wrong, but you took a bunch of heat from a group of posters who claimed the conversation was a complete distraction to a value investor board, and lacked proper analysis. 

 

Then, Baker Street releases a detailed analysis, with many of the same points you were trying to make and everyone takes notice.

 

Again, I know that you shouldn't look to market to determine whether you were right or wrong and anything can happen from here.  But, I thought you deserve a hat tip!  Like Buffett says about stock tips, you are either right and no one gives you credit or you are wrong and no one will let you forget it.

 

Thank you for your contribution to the board.

 

Buckeye

[Parsad]

If price stays the same, short sellers will be impatient and cover slowly. So I think as long as there is no news, the tendency is up.

 

It has been so far.  Numbers wise, it is one of the biggest squeezes you will see based on shares short and actual available float.  It's the main reason we jumped in with the LEAPs.  This movement has been happening with no news other than an analyst report.  Can you imagine what will happen if Sears actually makes some progress in a quarter?  It's even much tighter than the Overstock squeeze, so any good news and this thing could prove to be a nightmare for the shorts.  Cheers!

 

This is the exact reason why I've believed the short interest discussion has been relevant for this message board (as well as Lampert and Berkowitz increasing their ownership concentration).  Not sure if others still believe it's an irrelevant topic.  Obviously short interest is not part of the investment thesis, but when a phenomenon is likely to happen it is important to at least discuss and monitor.

 

I think short interest definitely matters if you are on the opposite side of the analysis.  I've made considerable sums betting against shorts on several occasions, and that was because I felt their analysis was partly incorrect.  Not completely incorrect, but often shorts are correct on one aspect of a troubled business, and like optimistic longs, they tend to negate the other side of the argument.  But if you are long, it will never kill you and you'll go to zero if you are wrong.  If you are short, it won't just kill you, but the squeeze will run right past zero and take everything you have except your life...and most wish it would take their life too!  So in my opinion, short interest definitely matters in certain situations when the analysis may not be fully accurate.  Think FFH, BH, BAC, OSTK and now SHLD.  Cheers!

[zippy1]

Thank you, Luke!

+1

 

I got to hand it to you Luke.  You showed up with a flurry of posts and an extremely bullish thesis at what looks to be a short term bottom.  I know that the market doesn't confirm whether you are right or wrong, but you took a bunch of heat from a group of posters who claimed the conversation was a complete distraction to a value investor board, and lacked proper analysis. 

 

Then, Baker Street releases a detailed analysis, with many of the same points you were trying to make and everyone takes notice.

 

Again, I know that you shouldn't look to market to determine whether you were right or wrong and anything can happen from here.  But, I thought you deserve a hat tip!  Like Buffett says about stock tips, you are either right and no one gives you credit or you are wrong and no one will let you forget it.

 

Thank you for your contribution to the board.

 

Buckeye