namo Posted June 11, 2015 Share Posted June 11, 2015 Anyone know how this rights offering would impact a short put and warrant position? How does the exercise price get adjusted? Thanks Option adjustments: SHLD@NASDAQ ; Rights Issue ; Jun 10, 2015 ; 36858 36859 36860 36864 36865 36866 36867 36868 36869 36870 ; All OCC memos may be accessed by navigating to http://www.theocc.com/webapps/infomemos ( http://www.theocc.com/webapps/infomemos ) Memo 36858 is probably what you're looking for, for options. For the warrant, adjustments are decided by the Board IIRC. It'll likely be either the market value of the rights at close yesterday, or an average of the market value over the life of the rights. Link to comment Share on other sites More sharing options...
BTShine Posted June 11, 2015 Share Posted June 11, 2015 Just got a broker request to make my shares available for their securities lending program. The last time they contacted me to request my participation in the program was November '14. Link to comment Share on other sites More sharing options...
gr33ngi4nt Posted June 11, 2015 Share Posted June 11, 2015 Anyone know how this rights offering would impact a short put and warrant position? How does the exercise price get adjusted? Thanks Option adjustments: SHLD@NASDAQ ; Rights Issue ; Jun 10, 2015 ; 36858 36859 36860 36864 36865 36866 36867 36868 36869 36870 ; All OCC memos may be accessed by navigating to http://www.theocc.com/webapps/infomemos ( http://www.theocc.com/webapps/infomemos ) Memo 36858 is probably what you're looking for, for options. For the warrant, adjustments are decided by the Board IIRC. It'll likely be either the market value of the rights at close yesterday, or an average of the market value over the life of the rights. http://www.optionsclearing.com/webapps/infomemos;OCCPROD0PUBSESSION=4B352A19A54F6C931C2301F4BB4B900A.occ-ppube4l?number=36859&data-ipsquote-timestamp=201506&lastModifiedDate=06%2F08%2F2015+16%3A03%3A57 "The underlying price for SHLD1/1SHLD1 will be determined as follows: SHLD1 = SHLD + 0.30 (LE) + 0.0236 + SRG RT The SRG RT component of adjusted options SHLD1/1SHLD1 will remain a part of the SHLD1/1SHLD1 deliverable until the Rights have expired. Once the expiration of the Rights has been confirmed, the SRG RT component will be removed from the SHLD1/1SHLD1 deliverable. This change to the deliverables is expected to be effective on July 6, 2015." So we lose all the value of Seritage (from the rights)... this sucks! Link to comment Share on other sites More sharing options...
Picasso Posted June 11, 2015 Share Posted June 11, 2015 So where do the warrants get adjusted? Down to $25 or so? Link to comment Share on other sites More sharing options...
namo Posted June 11, 2015 Share Posted June 11, 2015 Just got a broker request to make my shares available for their securities lending program. The last time they contacted me to request my participation in the program was November '14. FYI, lending the warrants (SHLDW) with IB consistently brings in 11-13% (annualized)... even though IB takes half of the pie (so the borrowing cost is double that). So we lose all the value of Seritage (from the rights)... this sucks! Yes. It was the same in 2014 with the rights offering; I'm guessing it's the typical ruling in spinoff by rights. I wanted to sell some calls before the spin-off to benefit from this, but in the end I didn't. So where do the warrants get adjusted? Down to $25 or so? I would say in the $22-25 range, but wait & see. Link to comment Share on other sites More sharing options...
thinkpad Posted June 11, 2015 Share Posted June 11, 2015 https://www.bamsec.com/filing/91957415004849?cik=1310067 berkowitz adds more SHLD. Link to comment Share on other sites More sharing options...
heth247 Posted June 15, 2015 Share Posted June 15, 2015 Any body got his SRG rights from Scottrade? I still haven't got it. Link to comment Share on other sites More sharing options...
wisdom Posted June 15, 2015 Share Posted June 15, 2015 http://business.financialpost.com/news/retail-marketing/german-kaufhof-deal-a-play-on-real-estate-for-savvy-hudsons-bay-co Link to comment Share on other sites More sharing options...
20ppy Posted June 16, 2015 Share Posted June 16, 2015 Anyone know how this rights offering would impact a short put and warrant position? How does the exercise price get adjusted? Thanks Option adjustments: SHLD@NASDAQ ; Rights Issue ; Jun 10, 2015 ; 36858 36859 36860 36864 36865 36866 36867 36868 36869 36870 ; All OCC memos may be accessed by navigating to http://www.theocc.com/webapps/infomemos ( http://www.theocc.com/webapps/infomemos ) Memo 36858 is probably what you're looking for, for options. For the warrant, adjustments are decided by the Board IIRC. It'll likely be either the market value of the rights at close yesterday, or an average of the market value over the life of the rights. http://www.optionsclearing.com/webapps/infomemos;OCCPROD0PUBSESSION=4B352A19A54F6C931C2301F4BB4B900A.occ-ppube4l?number=36859&data-ipsquote-timestamp=201506&lastModifiedDate=06%2F08%2F2015+16%3A03%3A57 "The underlying price for SHLD1/1SHLD1 will be determined as follows: SHLD1 = SHLD + 0.30 (LE) + 0.0236 + SRG RT The SRG RT component of adjusted options SHLD1/1SHLD1 will remain a part of the SHLD1/1SHLD1 deliverable until the Rights have expired. Once the expiration of the Rights has been confirmed, the SRG RT component will be removed from the SHLD1/1SHLD1 deliverable. This change to the deliverables is expected to be effective on July 6, 2015." So we lose all the value of Seritage (from the rights)... this sucks! See the reader comments on this article about the warrant price/count adjustments… http://seekingalpha.com/article/3256615-sears-holdings-common-warrants-and-seritage-rights-are-substantially-mispriced Link to comment Share on other sites More sharing options...
ni-co Posted June 16, 2015 Share Posted June 16, 2015 I like the Jan 17 calls at this level. Link to comment Share on other sites More sharing options...
adesigar Posted June 16, 2015 Share Posted June 16, 2015 Has anyone tried selling their Rights? I put in an order below what I was told the bid/ask was, but it did not execute. Link to comment Share on other sites More sharing options...
randomep Posted June 16, 2015 Share Posted June 16, 2015 I haven't seen any mention of the lawsuit in the thread. http://www.chicagotribune.com/business/breaking/ct-sears-0602-biz-20150601-story.html So does it have merit? Link to comment Share on other sites More sharing options...
Kuhndan Posted June 17, 2015 Share Posted June 17, 2015 Has anyone tried selling their Rights? I put in an order below what I was told the bid/ask was, but it did not execute. I tried to exercise the right today through Ameritrade and they said the terms have not been set yet and they were waiting for additional detail from the company. I'm not sure what that might be, my sense was that it was set. They said to call back tomorrow. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted June 17, 2015 Share Posted June 17, 2015 http://www.bizjournals.com/phoenix/news/2015/06/15/sears-sells-chandler-arrowhead-stores-in-50m-sale.html Sears sold the Chandler store to the joint venture MS Portfolio for $26.9 million and the Arrowhead store to the same group for $23 million. Link to comment Share on other sites More sharing options...
JAllen Posted June 17, 2015 Share Posted June 17, 2015 Has anyone spent a lot of time on the "exchange" language in the Seritage prospectus? The way the Fairholme and Lampert entities are getting their shares are stipulated by two exchange agreements, both of which weren't filed as exhibits, though the prospectus says they were. Link to comment Share on other sites More sharing options...
namo Posted June 17, 2015 Share Posted June 17, 2015 I sold my rights for prices between $4.7 and $6.2. I use IB. I'm not sure what you're referring to, JAllen? From memory: - There is an "UPREIT" structure, with Lampert receiving a large portion of the operating subsidiary - Berkowitz has voting and non-voting shares - Lampert also has non-economic shares Why do the details matter to you? As for the lawsuit, since all SHLD shareholders can participate proportionally to the size of their holdings, I don't see how the spin-off by rights is unfair. But I'm no lawyer. Link to comment Share on other sites More sharing options...
JAllen Posted June 17, 2015 Share Posted June 17, 2015 I was wondering if there was a way that there will end up being less than ~55m shares outstanding. Was thinking that the ESL and Fairholme exchange agreementshave could allow them to swap their rights for OP units, and that they would invest less cash than their 76m* $29.58 per share. There is quite a bit of language in the prospectus that suggests this could happen, and there is some that says this is not what is happening. So just a curiosity I have. Link to comment Share on other sites More sharing options...
20ppy Posted June 17, 2015 Share Posted June 17, 2015 Jun 15, 2015 LAMPERT EDWARD 1,220,083 Indirect Disposition (Non Open Market) at $0 per share. Jun 15, 2015 LAMPERT EDWARD 180,386 Indirect Purchase Link to comment Share on other sites More sharing options...
smj Posted June 18, 2015 Share Posted June 18, 2015 http://www.sec.gov/Archives/edgar/data/923727/000119312515224092/d943054dsc13da.htm "The Reporting Persons are filing this Amendment to report: (i) a distribution of shares of Holdings Common Stock by SPE Master I on a pro rata basis to its partners, including to RBS; (ii) a distribution of shares of Holdings Common Stock by SPE I on a pro rata basis to its partners, including to RBS; and (iii) a distribution of shares of Holdings Common Stock by RBS to Mr. Lampert on a pro rata basis." "Pursuant to the Seritage Rights Offering, Holdings distributed to Partners, SPE I, SPE Master I, CRK LLC, Institutional and Mr. Lampert, at no charge, an aggregate of 51,765,284 subscription rights. The SPEs are liquidating entities and do not make new investments, such as the exercise of subscription rights. Accordingly, on June 15, 2015, the SPEs distributed pro rata to each of their respective owners, including indirectly Mr. Lampert, all the subscription rights they received in the Sertiage Rights Offering.” Link to comment Share on other sites More sharing options...
valuetrojan10 Posted June 18, 2015 Share Posted June 18, 2015 I was wondering if there was a way that there will end up being less than ~55m shares outstanding. Was thinking that the ESL and Fairholme exchange agreementshave could allow them to swap their rights for OP units, and that they would invest less cash than their 76m* $29.58 per share. There is quite a bit of language in the prospectus that suggests this could happen, and there is some that says this is not what is happening. So just a curiosity I have. I've attached what I'm calculating as the shares outstanding. Its my understanding that SRG will own 55.1% of the operating partnership (OP) and ESL will own 44.9% of the OP. The common shares outstanding will be 30.6, on a fully-diluted basis. The Class C (fairholme shares), non-voting will actually not show up as common shares unless they've converted, but I will assume that they'll be converted. Also, it would seem that Eddie's non-economic OP shares wouldn't really have value unless converted. Either way, the total fully-diluted share count should be 55.6 million. Not quite sure what to make of the 1.2 million non-economic shares that aren't reflected in the share count, but it wasn't substantial enough for me to dig further. Link to comment Share on other sites More sharing options...
ni-co Posted June 20, 2015 Share Posted June 20, 2015 All bearish comments I've read on the REIT rights offering so far have largely ignored the value of the long term lease contracts which remain at SHLD. Yes, SHLD can't put those into a REIT. Yet, you're hugely underestimating the worth of the remaining SHLD RE by not taking them into account. Berkowitz treats those long term contracts as equivalents to ownership – and rightly so in my opinion. Link to comment Share on other sites More sharing options...
peter buffet Posted June 20, 2015 Share Posted June 20, 2015 Hi Nico, You are right these lease remains valuable for Sears Holdings. But about the right offering, do you consider to buy Seritage or do you prefer to sell the rights and to put your money into the Holdings? Thanks Link to comment Share on other sites More sharing options...
ni-co Posted June 20, 2015 Share Posted June 20, 2015 I didn't participate in the rights offering because I held options. I didn't analyze Seritage (because I didn't have time to do it) but my guess is that the risk/reward ratio is not even close to SHLD. As of now, I'm only holding SHLD calls. Link to comment Share on other sites More sharing options...
peter buffet Posted June 21, 2015 Share Posted June 21, 2015 Thanks Ni-Co for your comments. I used options last year but to sell call when the shares where around this price also for a 30% return for 18 months before expiration. Link to comment Share on other sites More sharing options...
frugalchief Posted June 22, 2015 Share Posted June 22, 2015 Welp, http://globenewswire.com/news-release/2015/06/22/746259/0/en/Investor-Alert-Lawsuit-Against-CEO-and-Directors-of-Sears-Holdings-Corp-NASDAQ-SHLD-Announced-by-Shareholders-Foundation.html Link to comment Share on other sites More sharing options...
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