alertmeipp Posted January 10, 2014 Author Share Posted January 10, 2014 Where is Sanjay? Outside of Fairfax and Berkshire, we won't be talking about any of our holdings going forward...you'll have to watch filings or be a partner. ;D I will say one thing...one quarter of results does not sway our views either way. Cheers and please keep your heads on! oh, didn't realize the change of policy, that is too bad for us Link to comment Share on other sites More sharing options...
phil_Buffett Posted January 10, 2014 Share Posted January 10, 2014 be greedy when others are fearful. the stock Drops from 65$ to 36$ in the last 2 months. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted January 10, 2014 Share Posted January 10, 2014 be greedy when others are fearful. the stock Drops from 65$ to 36$ in the last 2 months. Seriously. I thought everyone knew this was a jockey stock with an awful retail component. So many said they wanted to buy in the 30s - this is what it takes to get there. Now man up and buy because nothing has changed. Its a jockey stock with an awful retail operation. I haven't dug into the press release, but if these losses are GAAP losses from store closures then it should be expected. If not, then wouldn't accelerated losses make EL more likely to liquidate sooner? Nothing has really changed. Link to comment Share on other sites More sharing options...
phil_Buffett Posted January 10, 2014 Share Posted January 10, 2014 be greedy when others are fearful. the stock Drops from 65$ to 36$ in the last 2 months. Seriously. I thought everyone knew this was a jockey stock with an awful retail component. So many said they wanted to buy in the 30s - this is what it takes to get there. Now man up and buy because nothing has changed. Its a jockey stock with an awful retail operation. I haven't dug into the press release, but if these losses are GASP losses from store closures then it should be expected. If not, then wouldn't accelerated losses make ELECTION more likely to liquidate sooner? Nothing has really changed. i gladefully sold at 63$ and bought back at 46$. a Little bit to early but i bought yesterday and today also an amount and average down. i like the Price very much. it is for me to much Panic in the media. iam greedy here. Link to comment Share on other sites More sharing options...
value-is-what-you-get Posted January 10, 2014 Share Posted January 10, 2014 Where is Sanjay? Outside of Fairfax and Berkshire, we won't be talking about any of our holdings going forward...you'll have to watch filings or be a partner. ;D I will say one thing...one quarter of results does not sway our views either way. Cheers and please keep your heads on! On balance, I think this is worse news by a mile than the SHLD release yesterday. It's a permanent loss of intellectual board capital - not that we paid anything for it in the first place! I understand why, but will miss Sanjeev's direct and concise analysis. Link to comment Share on other sites More sharing options...
Luke 532 Posted January 10, 2014 Share Posted January 10, 2014 It's a permanent loss of intellectual board capital - not that we paid anything for it in the first place! I understand why, but will miss Sanjeev's direct and concise analysis. Agreed. One of the major competitive advantages of this message board (Sanjeev's brain) will be missed. Link to comment Share on other sites More sharing options...
bmichaud Posted January 10, 2014 Share Posted January 10, 2014 HUGE loss for the board. I'd put big money on it the BAC idea would not have gained nearly as much traction had Sanjeev not been pounding the table in late 2011/early 2012. Link to comment Share on other sites More sharing options...
stahleyp Posted January 10, 2014 Share Posted January 10, 2014 Maybe it's my wishful thinking, but I don't think he'll stop sharing a good amount of his thoughts. He loves us after all! ;) Link to comment Share on other sites More sharing options...
kirkomi Posted January 10, 2014 Share Posted January 10, 2014 I did not read everything (there were great case studies) :( Did someone have the time to download it? I found another copy on Issu.com: http://issuu.com/teee6/docs/baker_street_capital_management They don't allow downloads for this document, but there is always a way ;) http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_1.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_2.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_3.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_4.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_5.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_6.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_7.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_8.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_9.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_10.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_11.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_12.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_13.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_14.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_15.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_16.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_17.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_18.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_19.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_20.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_21.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_22.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_23.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_24.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_25.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_26.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_27.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_28.jpg Those are not working either. Any of you have a downloaded copy of the Baker Street Presentation ? Regards Link to comment Share on other sites More sharing options...
value-is-what-you-get Posted January 10, 2014 Share Posted January 10, 2014 I did not read everything (there were great case studies) :( Did someone have the time to download it? I found another copy on Issu.com: http://issuu.com/teee6/docs/baker_street_capital_management They don't allow downloads for this document, but there is always a way ;) http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_1.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_2.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_3.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_4.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_5.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_6.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_7.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_8.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_9.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_10.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_11.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_12.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_13.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_14.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_15.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_16.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_17.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_18.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_19.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_20.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_21.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_22.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_23.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_24.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_25.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_26.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_27.jpg http://image.issuu.com/130228214714-2bd8db7d315d454cb0ded933ecfcd115/jpg/page_28.jpg Those are not working either. Any of you have a downloaded copy of the Baker Street Presentation ? Regards Try this: http://www.bakerstreetcapital.com/BakerStreet_SHLD.pdf Link to comment Share on other sites More sharing options...
peridotcapital Posted January 10, 2014 Share Posted January 10, 2014 Does this really seem like an unfair assessment in light of yesterday's press release? Sears Holdings' earnings continue to shock on the downside, with each quarter seemingly worse than the previous one. From a moderate positive cash flow retailer a few years back, Sears has turned its operations into a $1.2 billion negative cash flow story in 2013 (assuming similar January outflows from previous years). More important, as Sears passes off its good locations and its profitable segments, and loses market share to stronger retailers in its core franchises, the hope of this disaster turning around becomes remote. Ironically, in our opinion, what protects Sears at this stage from vendors shutting them down is Sears' large size, as for many vendors, as long as Sears still pays the bills, it is worth the risk to ship them. However, a combination of continuing to strip out the good pieces (Sears Canada has or is selling off their best Canadian locations and Sears Hometown and Lands' End represent two of the strong segments in America) and market share losses at the core has to concern suppliers. One wonders how long this story will go on. The bulls on the stock continue to point to the underlying assets, but by continuing to operate, Sears is reducing that value now by nearly an astonishing $10 to $14 a share per year. The company is offsetting that decline by reducing inventory and selling off assets but that just leads to a spiral of lower results. Sears Canada, in our opinion, based on our knowledge of our domestic market, seems to be challenged, with Sears selling off its prime locations, effectively choosing to liquidate the chain for its real estate value. It will go through the operating motions for a few more years, but without Yorkdale and Eaton Centre and select others, it seems to have lost its will to compete. In America, for the most part Sears has held on to its best stores, but management is taking profitable chunks of the operations away, and the refusal to invest in store infrastructure at a time that HD and LOW and BBY and WMT and TGT and now JCP have is leading to significant share losses. Regaining that share against what is primarily an elite group we do not believe will happen. Sears has been keeping vendors at bay by selling more than enough assets to fund its operations. Its balance sheet does not look bad, as other than a $1 billion accordion term loan added this year the rest of the cash shortfall was funded through inventory reductions and Canadian property sales. However, finding $1.2 billion per year to fund the business, while still trying to spinoff some of the last vestiges of profitability seems like a short-term strategy at best. To address the accelerating EBITDA losses discussed above, SHLD through the first three quarters of 2013 has generated slightly less than $1 billion in real estate proceeds primarily from Sears Canada transactions. The company has also reduced net inventory investment by $321 million y/y as of Q3 and looks to achieve $200 million of fixed expense reductions y/y. However, despite these actions, net debt for SHLD in Q3 increased $717 million y/y, which was funded with a $1 billion fixed debt offering. Sears' balance sheet remains strong as we mentioned above and there seems to be a ready supply of assets to sell, but that does not seem to us to be a winning long-term strategy. As mentioned in the press release, Sears will be receiving C$300 million from the distribution from Sears Canada, although we believe the majority of that will go to pay off payables given the Christmas season buildup. Ultimately, our thinking on SHLD has remained the same for some time. Yes, Sears can sell off more and more profitable businesses, but to the extent that these were profitable operations and synergistic with the remaining core they just create larger problems in the future. The bulls continue to point to the underlying asset values, but we end again as we normally do with this question. If the assets have so much value, why does SHLD continue to operate given it is losing about $1.2 billion per year through operations? It's from Gary Balter's report published today. I don't think it's unfairly harsh, or all that inaccurate. Personally, I think the first half of 2014 is crucial. If we just get more of the 2013 playbook this year (in terms of strategy and financial results) then I don't think Eddie really is determined to turn up the dial and get the business model transformed (i.e. more real estate focused) quickly. If, however, we start to see some seriously sharp deviations in strategy that give us a more clear picture as to what the overall plan is now that retail is a ticking time bomb, then it might make a lot of sense to become more constructive, especially with the stock in the 30's. Full disclosure: Since I plan on attending the annual meeting in early May (to try and get a better sense of where Eddie is going with this), as of last night I am long a very small odd lot of SHLD at $36 (it's just to get me in the door - I haven't switched to a bull quite yet...) Link to comment Share on other sites More sharing options...
Aberhound Posted January 10, 2014 Share Posted January 10, 2014 Where is Sanjay? Outside of Fairfax and Berkshire, we won't be talking about any of our holdings going forward...you'll have to watch filings or be a partner. ;D I will say one thing...one quarter of results does not sway our views either way. Cheers and please keep your heads on! I am crying into my coffee. As Sanjay doesn't discuss the reasoning for his investments in his firm's reports as he has on this board this means we won't continue to enjoy his teachings. I propose that Sanjay be allowed to post with an alias and we all agree never to discuss on the board which alias Sanjay is using. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted January 10, 2014 Share Posted January 10, 2014 I know I've paid a few hundred bucks into the "Donations" bucket over time. I figure if you all did that, he'd have a very solid income of a few hundred thousand a year. Link to comment Share on other sites More sharing options...
jeffmori7 Posted January 10, 2014 Share Posted January 10, 2014 Where is Sanjay? Outside of Fairfax and Berkshire, we won't be talking about any of our holdings going forward...you'll have to watch filings or be a partner. ;D I will say one thing...one quarter of results does not sway our views either way. Cheers and please keep your heads on! I am crying into my coffee. As Sanjay doesn't discuss the reasoning for his investments in his firm's reports as he has on this board this means we won't continue to enjoy his teachings. I propose that Sanjay be allowed to post with an alias and we all agree never to discuss on the board which alias Sanjay is using. I know we could start by calling him Sanjeev :) Link to comment Share on other sites More sharing options...
ERICOPOLY Posted January 10, 2014 Share Posted January 10, 2014 So apparently there is a short selling restriction in effect for SHLD from Jan 10th until Jan 13th. Why? What are the reasons for that? Link to comment Share on other sites More sharing options...
compoundinglife Posted January 10, 2014 Share Posted January 10, 2014 So apparently there is a short selling restriction in effect for SHLD from Jan 10th until Jan 13th. Why? What are the reasons for that? Odd. Is it the result of tripping a circuit breaker? Link to comment Share on other sites More sharing options...
muscleman Posted January 10, 2014 Share Posted January 10, 2014 Where are the losses coming from??? Has to be cleared out inventory right at cheap prices? or something non-cash. Cash end of Q3 was $600 Mill + $450 anticipated from Canadian sales Cash 1/4/2014 is $1000 Mill + $300 anticipated from Canadian Sales. Cash Availibity from borrowings: Revolver in Q3 - $1000 mill availability Domestic + 725 million + $340 Commercial Paper Revolver in Q4 - $1.8 mill availability Domestic + 500 milloin + $494 commercial paper so + 980 in cash for the quarter? minus what in net inventory? Revolver is down by $800 m, but don't you remember in Q3, they took a $1 bn term loan to replace the revolver? I think there are several points that needs to look into from this statement: "This includes $41 million of pension expense, $29 million for store closures and severance and $12 million from gains on sales of assets." 1. The gain on sale of assets is very low. How many buildings is that? 2. $41 m of pension expense. This is very strange. I remember in Q3, someone studies the pension, and told us that due to interest increase, they should report a pension liability reduction of $700 m, and that should be recorded in Q4. But now we are seeing a $41 m pension expense instead. Why? Term loan was already in place in Q3. http://searsholdings.com/invest/docs/Q3_2013_Webcast.pdf Page 24. I spent an hour trying to find out what was wrong with your numbers, but I couldn't. I am really confused right now. How could they report such a big loss but magically got that 980 mn cash? ::) I guess we would have to wait a bit longer until 10-K comes out. If the 980 mn cash is the beginning of his much awaited fast liquidation, then I would be very interested to increase my 5% position to a much bigger one, but right now I can't figure out how these numbers align. :-\ Link to comment Share on other sites More sharing options...
muscleman Posted January 10, 2014 Share Posted January 10, 2014 So apparently there is a short selling restriction in effect for SHLD from Jan 10th until Jan 13th. Why? What are the reasons for that? Were you trying to short this sucker and got an error message? Link to comment Share on other sites More sharing options...
BTShine Posted January 10, 2014 Share Posted January 10, 2014 Eric, That's really interesting. Do you have a link this information? Link to comment Share on other sites More sharing options...
muscleman Posted January 10, 2014 Share Posted January 10, 2014 Guys, I sold at $61 last year and bought back recently. I built a 5% position at $44.9, and I am feeling bad. I guess Baker Street is probably feeling a bigger pain than us. http://google.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=9654589-1492-33456&type=sect&TabIndex=2&companyid=656789&ppu=%252fdefault.aspx%253fsym%253dSHLD Look at this find print: 1 Includes 9,498,300 shares of Common Stock underlying certain options exercisable within 60 days. I checked google finance's option chain, but I can't find such a big call position expiring so soon. I guess they probably did some private customized call option with some IBank. Link to comment Share on other sites More sharing options...
BTShine Posted January 10, 2014 Share Posted January 10, 2014 The increase in cash, and any paydown of debt/revolver this quarter, is certainly affected by the decrease of inventory that occurs every Q4. Most years the Q4 inventory shrinks (due to sales) by about $2 Billion from Q3 to Q4. This inventory is turned into cash, which either is held on the balance sheet or is used to pay down debt. Link to comment Share on other sites More sharing options...
alertmeipp Posted January 10, 2014 Author Share Posted January 10, 2014 sears canada recovers from this morning drop and is currently green. how much of terrible retail business is priced into current pps, too much or too little.... billion dollar question Link to comment Share on other sites More sharing options...
onyx1 Posted January 10, 2014 Share Posted January 10, 2014 So apparently there is a short selling restriction in effect for SHLD from Jan 10th until Jan 13th. Why? What are the reasons for that? http://www.sec.gov/news/press/2010/2010-26.htm Link to comment Share on other sites More sharing options...
hyten1 Posted January 10, 2014 Share Posted January 10, 2014 - shld close stores - convert inventory to cash at a gaap loss - less store, need less inventory for next cycle - while at the same time re-purpose/sale/give back the free up real estate - repeat until the remaining store can achieve gaap profit (if ever) this about sums it up for me what shld is doing? Link to comment Share on other sites More sharing options...
ZenaidaMacroura Posted January 10, 2014 Share Posted January 10, 2014 Guys, I sold at $61 last year and bought back recently. I built a 5% position at $44.9, and I am feeling bad. I guess Baker Street is probably feeling a bigger pain than us. http://google.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=9654589-1492-33456&type=sect&TabIndex=2&companyid=656789&ppu=%252fdefault.aspx%253fsym%253dSHLD Look at this find print: 1 Includes 9,498,300 shares of Common Stock underlying certain options exercisable within 60 days. I checked google finance's option chain, but I can't find such a big call position expiring so soon. I guess they probably did some private customized call option with some IBank. Not sure but a friend of mine more knowledgable said this just means the options are exercise able - that there is no restriction (as in vesting period) . This doesn't mean the options can't be 2015 expiry. I remember someone looked up the opt chain when they were filed and deduced the contracts they were (jan 2015- don't remember the strike price) Link to comment Share on other sites More sharing options...
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