SHLDQ - Sears Holdings Corp

[thecynic]

Doesn't RBS Partners report on 13/14th of Feb too?

 

RBS Partners filing is out, looks like they reduced their sears holdings from 33M to 26M:

http://www.sec.gov/Archives/edgar/data/860585/000095012314002717/xslForm13F_X01/form13fInfoTable.xml

 

EDIT: My mistake, I compared just the two 13Fs without looking at intervening Form 4s.

[ZenaidaMacroura]

Doesn't RBS Partners report on 13/14th of Feb too?

 

RBS Partners filing is out, looks like they reduced their sears holdings from 33M to 26M:

http://www.sec.gov/Archives/edgar/data/860585/000095012314002717/xslForm13F_X01/form13fInfoTable.xml

 

EDIT: My mistake, I compared just the two 13Fs without looking at intervening Form 4s.

On the go right now and when I load the filings it's just unformatted text - is there any ultimate change in holdings after accounting for the form 4s?  Just 7k shares net shld disbursements right (which he re acquired)? 

[merkhet]

I'm looking at the Baker Street Capital Management, LLC 13F filings:

 

From the last 13-F filed 2013-11

SEARS HLDGS CORP(Shares) $89,235M  Number: 1,500,000

SEARS HLDGS CORP(Calls) $416,430M Number: 7,000,000

 

From today's filings:

SEARS HLDGS CORP(shares) $125,052M  Number: 2,550,000

SEARS HLDGS CORP(calls) $495,569M  Number:10,105,400

SEARS HLDGS CORP(puts) $127,852M Number: 2,607,100

 

Looks like they added to their calls & shares but also bought some put protection. So the 9M number is net of the puts.

 

Except that it doesn't net out to 9M but 10M. Curiouser and curiouser.

[peridotcapital]

I'm looking at the Baker Street Capital Management, LLC 13F filings:

 

From the last 13-F filed 2013-11

SEARS HLDGS CORP(Shares) $89,235M  Number: 1,500,000

SEARS HLDGS CORP(Calls) $416,430M Number: 7,000,000

 

From today's filings:

SEARS HLDGS CORP(shares) $125,052M  Number: 2,550,000

SEARS HLDGS CORP(calls) $495,569M  Number:10,105,400

SEARS HLDGS CORP(puts) $127,852M Number: 2,607,100

 

Looks like they added to their calls & shares but also bought some put protection. So the 9M number is net of the puts.

 

Except that it doesn't net out to 9M but 10M. Curiouser and curiouser.

 

The 13F is as of 12/31/13. The 13G amendment is as of 2/14/14 (see item 4).

[Matson125]

http://www.jsonline.com/blogs/business/245537821.html

 

Sears and CBL do another deal

[Luke 532]

Fine Capital adds 123,053 shares (1,436,022 Q3 to 1,559,075 Q4): https://www.sec.gov/Archives/edgar/data/1339161/000091957414001292/xslForm13F_X01/infotable.xml

 

[merkhet]

I'm looking at the Baker Street Capital Management, LLC 13F filings:

 

From the last 13-F filed 2013-11

SEARS HLDGS CORP(Shares) $89,235M  Number: 1,500,000

SEARS HLDGS CORP(Calls) $416,430M Number: 7,000,000

 

From today's filings:

SEARS HLDGS CORP(shares) $125,052M  Number: 2,550,000

SEARS HLDGS CORP(calls) $495,569M  Number:10,105,400

SEARS HLDGS CORP(puts) $127,852M Number: 2,607,100

 

Looks like they added to their calls & shares but also bought some put protection. So the 9M number is net of the puts.

 

Except that it doesn't net out to 9M but 10M. Curiouser and curiouser.

 

The 13F is as of 12/31/13. The 13G amendment is as of 2/14/14 (see item 4).

 

Ah, thanks Chad.

[adesigar]

So as of end of last year Eddie Lampert (personal + Funds) + Fairholme + Baker street (Including Calls) + Force Capital (Including Calls) is approx. 93 Million Shares out of 107 Million Float. So 14 Million not controlled by 4 people and 15+ Million Short interest.

 

 

 

[Luke 532]

So as of end of last year Eddie Lampert (personal + Funds) + Fairholme + Baker street (Including Calls) + Force Capital (Including Calls) is approx. 93 Million Shares out of 107 Million Float. So 14 Million not controlled by 4 people and 15+ Million Short interest.

 

I'd be very cautious including calls in any short interest calculation.  Anybody can buy a boatload of calls... it doesn't mean they have the cash to actually exercise them, nor is there any guarantee exercising would be their desire even if they did have the cash.  For example, I have a lot of OTM calls and some ITM calls which I have no intention of exercising... the plan is to just sell the calls at some point.

 

Shorts are in a precarious position given the short interest dynamics even when you don't include calls.

[ni-co]

Lampert squeezing lemons. Maybe, somebody has already posted a link to this great post into this thread:

http://oddlotinvest.wordpress.com/2014/01/11/lamperts-lemon-and-lemmans-lemonade-the-difference-between-value-creation-and-destruction/

 

I almost missed it, however. Thank you, Liberty, for posting it.

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/lampert-vs-lemman/

[Luke 532]

Kroger plans move to York County Kmart building

http://www.dailypress.com/business/dp-nws-kroger-kmart-20140217,0,778386.story

 

"We're proposing that we'd be building a new 90,000-square-foot prototype Kroger store in one half of the Kmart," The Kroger Co. real estate manager Fenton Childers told the York County Planning Commission, according to online video of the Feb. 12 meeting.

 

Kmart had been underutilizing its space, Childers said. Online property records show the entire Kmart property at 5007 Victory Blvd., including a garden center and garage, is 190,000 square feet.

 

"The lease agreement with Kroger is a great example of Sears Holdings selectively redeploying its asset base to dramatically improve our retail shopping experience while working to create long-term shareholder value," Alan Shaw, Sears Holdings vice president for real estate, said in a statement.

 

Prototype?  Perhaps if all goes well Kroger will want to do the same on a much larger scale?

[muscleman]

Kroger plans move to York County Kmart building

http://www.dailypress.com/business/dp-nws-kroger-kmart-20140217,0,778386.story

 

"We're proposing that we'd be building a new 90,000-square-foot prototype Kroger store in one half of the Kmart," The Kroger Co. real estate manager Fenton Childers told the York County Planning Commission, according to online video of the Feb. 12 meeting.

 

Kmart had been underutilizing its space, Childers said. Online property records show the entire Kmart property at 5007 Victory Blvd., including a garden center and garage, is 190,000 square feet.

 

"The lease agreement with Kroger is a great example of Sears Holdings selectively redeploying its asset base to dramatically improve our retail shopping experience while working to create long-term shareholder value," Alan Shaw, Sears Holdings vice president for real estate, said in a statement.

 

Prototype?  Perhaps if all goes well Kroger will want to do the same on a much larger scale?

 

I wonder why there is no rental income in SHLD's SEC filings? Does ELS do this on purpose?

[beerbaron]

Finally a deep and trough analysis of Sears.

 

 

BeerBaron

[Luke 532]

I wonder why there is no rental income in SHLD's SEC filings? Does ELS do this on purpose?

 

Probably the same reason he rarely discloses redevelopment projects, closings, etc.

[mcliu]

Finally a deep and trough analysis of Sears.

 

 

BeerBaron

 

LOL +1

[Scudbucket]

Hi everyone,

 

I think the reason Eddie doesn't disclose any rental income is because there is no advantage to do so.  If he disclosed details about rental income it could potentially hurt the strategy down the line.  If Eddie disclosed enough details to the point potential tenants could deduce comparable contracts, this would lower his bargaining power.  It's unlikely he would even jeopardize that.  This is likely the same reason Bezos doesn't disclose the number of Kindles that have been sold.

 

You have to think CEOs and company strategists follow their competitors and vendors closely.  Knowing this, self-aware CEOs and company strategists will be extremely selective in what they disclose.  If you think about it, if you are doing something incredible, if you know something extremely valuable that others don't know, you would never tell anyone until you're done doing it because it doesn't make sense to show your hand beforehand.

[Luke 532]

Building Community Together

http://blog.searsholdings.com/voices-from-the-field/building-community-together/

[spin]

I wonder why there is no rental income in SHLD's SEC filings? Does ELS do this on purpose?

 

It is disclosed-10-K Note 14 -> sublease rentals.

 

Spin

 

[muscleman]

I wonder why there is no rental income in SHLD's SEC filings? Does ELS do this on purpose?

 

It is disclosed-10-K Note 14 -> sublease rentals.

 

Spin

 

No that seems to be what SHLD owes to others. It is a liability.

[spin]

I wonder why there is no rental income in SHLD's SEC filings? Does ELS do this on purpose?

 

It is disclosed-10-K Note 14 -> sublease rentals.

 

Spin

 

No that seems to be what SHLD owes to others. It is a liability.

 

sublease rentals is the income received.

 

lease payments (minimum & percentage) is what is owed/paid.

 

Spin

[merkhet]

It occurs to me that the perception that Sears Holdings is in trouble is creating a bit of a liability.

 

For instance, Eddie Bauer went for 1x sales. I've seen some articles floating around saying that ESL wanted $1.2 to $1.6 billion for Land's End, which is around the 1x sales marker. Perhaps ESL doesn't have the bargaining leverage that Golden Gate Capital has because buyers think that ESL needs the money. In the worst case scenario, they can always buy LE after it gets spun out or (unlikely IMO) through a bankruptcy sale -- and their highest paid price is likely 1x sales in either scenario. So there's really no downside to waiting...

[peridotcapital]

I wonder why there is no rental income in SHLD's SEC filings? Does ELS do this on purpose?

 

It is disclosed-10-K Note 14 -> sublease rentals.

 

Spin

 

No that seems to be what SHLD owes to others. It is a liability.

 

They disclose both. Gross rent paid and net rent paid (which is less the rental income collected, which is also disclosed). It's not material so it's easy to miss in the filings... rent paid is something like 10-15x the amount of rent received.

[ni-co]

It occurs to me that the perception that Sears Holdings is in trouble is creating a bit of a liability.

 

For instance, Eddie Bauer went for 1x sales. I've seen some articles floating around saying that ESL wanted $1.2 to $1.6 billion for Land's End, which is around the 1x sales marker. Perhaps ESL doesn't have the bargaining leverage that Golden Gate Capital has because buyers think that ESL needs the money. In the worst case scenario, they can always buy LE after it gets spun out or (unlikely IMO) through a bankruptcy sale -- and their highest paid price is likely 1x sales in either scenario. So there's really no downside to waiting...

 

Maybe, but don't you think that Lampert, Berkowitz & Co are going to keep their LE shares for a while? To me, it seems unlikely that they are going to sell them far below intrinsic value. Spin-offs can work wonders in terms of showing the market the value of an asset and LE has growth potential, too. I wouldn't be too surprised, if the market discovered that there actually is some upside in LE.

[merkhet]

I wonder why there is no rental income in SHLD's SEC filings? Does ELS do this on purpose?

 

It is disclosed-10-K Note 14 -> sublease rentals.

 

Spin

 

No that seems to be what SHLD owes to others. It is a liability.

 

They disclose both. Gross rent paid and net rent paid (which is less the rental income collected, which is also disclosed). It's not material so it's easy to miss in the filings... rent paid is something like 10-15x the amount of rent received.

 

That only discloses sub-leases but not the leases that Sears may have made on the RE that they own, right?

 

It occurs to me that the perception that Sears Holdings is in trouble is creating a bit of a liability.

 

For instance, Eddie Bauer went for 1x sales. I've seen some articles floating around saying that ESL wanted $1.2 to $1.6 billion for Land's End, which is around the 1x sales marker. Perhaps ESL doesn't have the bargaining leverage that Golden Gate Capital has because buyers think that ESL needs the money. In the worst case scenario, they can always buy LE after it gets spun out or (unlikely IMO) through a bankruptcy sale -- and their highest paid price is likely 1x sales in either scenario. So there's really no downside to waiting...

 

Maybe, but don't you think that Lampert, Berkowitz & Co are going to keep their LE shares for a while? To me, it seems unlikely that they are going to sell them far below intrinsic value. Spin-offs can work wonders in terms of showing the market the value of an asset and LE has growth potential, too. I wouldn't be too surprised, if the market discovered that there actually is some upside in LE.

 

ESL & BB won't sell LE for less than $1.00 (intrinsic value). In a spinoff, it's not likely for the company to trade above $1.00. In a bankruptcy, it's not likely for the company to trade above $1.00 either.

 

No downside to waiting. Possible upside to waiting. (Heck, given the spin-off dynamics, why not nibble a bit at the spin and decrease your weighted cost basis?)

[peridotcapital]

 

That only discloses sub-leases but not the leases that Sears may have made on the RE that they own, right?

 

I can see why the term sub"lease" would imply that, but it's hard for me to see how they earned $47M in 2012 from just 2/3 of their store base and only a fraction of their Sears stores (which are ~70% owned).  The only other place I could see that income being included would be under "services/other" revenue. But they define that category pretty specifically in the filing:

 

"Service and Other—includes repair, installation and automotive service and extended contract revenue as well as revenues earned in connection with our agreements with SHO."

 

I guess it's possible if the total figure is low enough they can get away with not even including it in that list, but then you would think they would at least phrase it to imply that the list was not exhaustive by using words like "including" or "such as."

 

Hopefully this year's 10K sheds some new light on it for us. Not disclosing Seritage upon formation is one thing, not disclosing that the properties they are managing are generating real rental income (even if you don't tell us how much and simply lump it in with other stuff), is quite another. Probably wishful thinking though, it is SHLD after all.