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SHLDQ - Sears Holdings Corp


alertmeipp

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looks like baker street might have cut their position a bunch today.

 

I was thinking the same thing with that 60/70 2015 call spread trade today on 15,000 contracts. Underlying was around $52 or $53 at the time of trade... SHLD + LE*0.3

 

I see 40,000 contracts moved at both strikes.

 

Lot of action.  They have 90,000 contracts or so if I remember correctly.

 

What're the filing requirements? If Baker Street was getting out, wouldn't they have to have filed something by now?

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looks like baker street might have cut their position a bunch today.

 

I was thinking the same thing with that 60/70 2015 call spread trade today on 15,000 contracts. Underlying was around $52 or $53 at the time of trade... SHLD + LE*0.3

 

I see 40,000 contracts moved at both strikes.

 

Lot of action.  They have 90,000 contracts or so if I remember correctly.

 

What're the filing requirements? If Baker Street was getting out, wouldn't they have to have filed something by now?

 

Seems that 15,000 was the current number based on the open interest (not sure why my screen showed 40K) - No they're not on a schedule D.

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Short interest update for those interested...

Short (as of 6/13/2014): 16.438M

Lampert/Berkowitz/Tisch: 80.348M

Outstanding: 106.451M

Float: 26.103M

Short interest as % of float: 63.0% (assuming zero shares are long-term oriented other than Lampert, Berkowitz, and Tisch).

 

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Short interest update for those interested...

Short (as of 6/13/2014): 16.438M

Lampert/Berkowitz/Tisch: 80.348M

Outstanding: 106.451M

Float: 26.103M

Short interest as % of float: 63.0% (assuming zero shares are long-term oriented other than Lampert, Berkowitz, and Tisch).

 

I don't pay much attention to days-to-cover as the average volume it's based on fluctuates wildly, but at 22+ days it's the highest it has been in at least a year (data on the following link only goes back one year): http://www.nasdaq.com/symbol/shld/short-interest

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Anyone have any thoughts on MetaScale?  http://www.metascale.com/company/about-us

 

Unless I missed it, it's not mentioned in Sears's annual report.

 

There's not much out there on MetaScale, but here are a few notes I've made on the company...

 

http://www.fool.com/investing/general/2013/09/28/sears-moves-into-data-centers.aspx

The business was borne out of demand from companies inquiring how Sears had transformed its own business. Ironically though the MetaScale website and news articles suggest the business is booming yet Sears hasn't mentioned MetaScale in any official releases since the original announcement.

 

More importantly, the development of Ubiquity CE and MetaScale involve making existing assets more productive without requiring massive capital outlays. Don't be surprised if Sears eventually spins off these operations in the future, but for now don't expect the company to discuss them at any length.

 

A couple of good examples of the values of large firms in these sectors include big data firm Splunk (NASDAQ: SPLK) and data center firm Equinix (NASDAQ: EQIX).  One reason Sears might be moving in this direction is that both of these much smaller companies have stock valuations in line with the market value of the vast assets of Sears. While Splunk is seen as the industry leader in big data software solutions that MetaScale is unlikely to replicate, the ability to turn an expected revenue base of $280 million in 2013 into a stock worth over $6 billion has to be appealing.

 

http://www.marketwatch.com/story/metascale-introduces-hadoop-appliance-combining-complete-technical-capability-with-proven-expertise-2014-02-11?reflink=MW_news_stmp

"Hadoop has evolved to the point where it is no longer a theoretical initiative. It is capable of delivering significant results, helping firms efficiently analyze incredible amounts of large data both structured and unstructured," said Ankur Gupta, general manager at MetaScale.

 

http://www.retailwire.com/discussion/15974/sears-sells-big-data-solutions-on-a-metascale

April 2012: Tom Aiello, a spokesperson for Sears Holdings, dismissed the criticism. "In emerging areas such as this, you can create a competitive advantage ... by having an edge on something like this," he told the Chicago Tribune. "We wouldn't have started the venture unless we recognized there was (an opportunity) around big data."

 

http://data-informed.com/after-building-customer-loyalty-program-sears-looks-to-sell-big-data-expertise/

While MetaScale said it isn’t making public any specific customers at this time, Nimmagadda said the subsidiary is “talking to potential customers that have $15 billion in revenue and also to customers that have $1 billion revenue.”

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From NREI June 25, 2014: http://nreionline.com/viewpoints/transforming-tired-inspired-retail

 

Excerpt...

"As place-making has become an increasingly important element in creating

value in today’s retail environment, are older shopping centers really

able to compete? The answer is absolutely, as outdated shopping centers

from coast to coast have been reborn through updated graphics, lighting,

signage, landscaping improvements, and minor architectural updates.

Such improvements have not only increased consumer traffic, but helped

to sway shoppers to stay longer and spend more."

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It's a bubble when Sears has a big data offering.

 

Not necessarily. I think it is more likely that they have a in-house solution for their needs for scale, and now are just trying to monetize it. This is the same as how AWS was developed and offered to public. I certainly wouldn't bet this will be a game changer for SHLD, but wouldn't look at it as a bubble either.

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Update: Nicolett Avenue Redevelopment (Minneapolis, MN)

http://www.startribune.com/local/blogs/264809501.html#t44fdezMzffgt54B.97

 

Excerpt:

Extended talks to reopen Nicollet Avenue at Lake Street reached a symbolic milestone Thursday when representatives of Kmart, their landlord and the city met for the first time in at least 30 years.

 

In a letter to the city this afternoon, Kmart Vice President James Terrell said his parent company Sears Holdings Corporation is "committed to working with the city to find a viable option for reopening Nicollet Avenue."

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It's a bubble when Sears has a big data offering.

 

Not necessarily. I think it is more likely that they have a in-house solution for their needs for scale, and now are just trying to monetize it. This is the same as how AWS was developed and offered to public. I certainly wouldn't bet this will be a game changer for SHLD, but wouldn't look at it as a bubble either.

 

I'm no expert, but I'd hazard to guess that the Sears IT infrastructure is fairly idiosyncratic and neglected, making it hard for me to understand who they would resell their expertise to, or what their competitive advantage is with incumbent service vendors (HP? IBM? Oracle?).  Hopefully it goes somewhere, and I guess it can be a fairly cheap experiment to run.

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FWIW Peridot's annual estimate on what Sears is getting for the PB Kids, PB Teen, and West Elm in rent is way off. Oakbrook Center is a $625 sales per square foot mall.

 

GGP Paid Sears $40 million to terminate Sears' lease (both the store 110k sq ft) and Auto Center at Columbiana. Columbiana is a $425 a sq ft mall.  Columbiana would've likely leased those stores at appx $35 a sq ft.

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Was going through a stack of old articles and came across a Business Week one on Lampert from 2004 asking if he is the next Buffett and will he turn KMart into the next BRK.

 

Very sad to read. He was on top of his game, fresh off a 5 bagger in Kmart in less than 3 years, cash rolling into the business, in prime position to redeploy into other businesses while he ran off the retail/real estate side.

 

The article mentioned how he desired to be a business expert, one that other CEOs would come to for advice.

 

What a tragic tale.

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What a tragic tale.

 

For those buying 8-10 years ago, yes, it has been a tragedy.  For those buying today I see a much different story being told long-term.

 

 

I would imagine anybody that has a position or is watching SHLD has read that article before... at least I would hope so!

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