constructive Posted October 3, 2014 Share Posted October 3, 2014 Mr Beemer forgets to tell us why ESL was able to buy Sears if it was run that well - I believe it was bought in bankruptcy. Sears was not in bankruptcy, in fact it was profitable and an investment grade credit. In retrospect, the price he paid for Sears was too high - $11B. You are thinking of Kmart which was in bankruptcy and very attractively priced when ESL took control. http://www.nbcnews.com/id/6509683/ns/business-stocks_and_economy/t/kmart-acquire-sears-billion-deal/#.VC33qvmwJcQ Link to comment Share on other sites More sharing options...
wisdom Posted October 3, 2014 Share Posted October 3, 2014 you are right constructive. Link to comment Share on other sites More sharing options...
wisdom Posted October 3, 2014 Share Posted October 3, 2014 I was reading this from 2004 (looks like nothing has changed in the last 10 years): The joint press release valued the transaction at $11 billion. It must be approved by shareholders. Sears has been failing for nearly four years, to the extent that investors were considering dismantling it for the underlying value of Sears real estate. Sears same-store sales declined in 13 of the past 15 quarters. Revenue fell 15 percent in the third quarter to $8.29 billion, the largest drop in more than eight years and the third straight quarter the decline exceeded 10 percent. Link to comment Share on other sites More sharing options...
tede02 Posted October 3, 2014 Share Posted October 3, 2014 I apologize for not reading through all 600+ pages of this thread. But when does Eddy finally make the decision to break this thing up? Sell the brands, perhaps spin the real estate off into a REIT, etc. The company, as a whole, is clearly dying. I just shake my head every time I drive by my local Sears which is in a relatively new shopping center that gets a ton of traffic. The parking lot is empty while those of Costco, Target, Home Depot, Menards and even Best Buy (though less than the others) have a lot traffic. Link to comment Share on other sites More sharing options...
Myth465 Posted October 3, 2014 Share Posted October 3, 2014 circlejerk I just had to capture that... Link to comment Share on other sites More sharing options...
Luke 532 Posted October 3, 2014 Share Posted October 3, 2014 TRANSACTIONS IN SHARES BY ACCOUNTS ADVISED BY FAIRHOLME CAPITAL MANAGEMENT, L.L.C Transaction: Purchase Date: 10/2/2014 Shares: 49,200 Price $26.37 http://www.sec.gov/Archives/edgar/data/1056831/000091957414005452/d6153120_13d-a.htm Link to comment Share on other sites More sharing options...
BTShine Posted October 3, 2014 Share Posted October 3, 2014 Does anyone have a list (or general knowledge) of Sears Canada's trophy properties? Link to comment Share on other sites More sharing options...
Luke 532 Posted October 3, 2014 Share Posted October 3, 2014 Does anyone have a list (or general knowledge) of Sears Canada's trophy properties? Sanjeev probably has a good idea as I believe he resides in Toronto and has commented on the Concord Pacific transactions in the past. Link to comment Share on other sites More sharing options...
Liberty Posted October 3, 2014 Share Posted October 3, 2014 Sanjeev probably has a good idea as I believe he resides in Toronto and has commented on the Concord Pacific transactions in the past. AFAIK Sanjeev is in Vancouver. Link to comment Share on other sites More sharing options...
Uccmal Posted October 3, 2014 Share Posted October 3, 2014 Does anyone have a list (or general knowledge) of Sears Canada's trophy properties? Sanjeev probably has a good idea as I believe he resides in Toronto and has commented on the Concord Pacific transactions in the past. Sanjeev lives in Vancouver. I live in Toronto. Sears has already monetized all the best properties. There is nothing good left. Eddie absolutely ruined Sears Canada. Everyone on this thread should do themselves a favour and study the destruction on SCC since ESL got involved. Furthermore, ESL is using debt to see SHLD through the holiday season, perhaps longer. How is this debt secured? In a normal windup the debt holders get the assets. We already know Eddie is a bankruptcy expert. I think when he is done with the destruction the common stock will be zero, and he will hold the Real estate. Link to comment Share on other sites More sharing options...
Luke 532 Posted October 3, 2014 Share Posted October 3, 2014 Sanjeev probably has a good idea as I believe he resides in Toronto and has commented on the Concord Pacific transactions in the past. AFAIK Sanjeev is in Vancouver. My bad. Link to comment Share on other sites More sharing options...
CorpRaider Posted October 3, 2014 Share Posted October 3, 2014 Does anyone have a list (or general knowledge) of Sears Canada's trophy properties? Sanjeev probably has a good idea as I believe he resides in Toronto and has commented on the Concord Pacific transactions in the past. Sanjeev lives in Vancouver. I live in Toronto. Sears has already monetized all the best properties. There is nothing good left. Eddie absolutely ruined Sears Canada. Everyone on this thread should do themselves a favour and study the destruction on SCC since ESL got involved. Furthermore, ESL is using debt to see SHLD through the holiday season, perhaps longer. How is this debt secured? In a normal windup the debt holders get the assets. We already know Eddie is a bankruptcy expert. I think when he is done with the destruction the common stock will be zero, and he will hold the Real estate. Well they sure as heck filed a very detailed loan participation agreement that has a lot of real estate devoted to how the RE collateral will be administered and who will be in charge if and when they foreclose on the loan. Link to comment Share on other sites More sharing options...
wisdom Posted October 3, 2014 Share Posted October 3, 2014 So will SHLD be insolvent by January? Any takers. Everyone is pretty sure of the outcome here or is it just easy to have an opinion. Link to comment Share on other sites More sharing options...
learningfromgiants Posted October 3, 2014 Share Posted October 3, 2014 Thinking out-of-the-box. Pls feel free to blow holes through it.... Lampert is a pretty bright guy and understands SCC lack of appeal, even to current shareholders. What is the chance he is offering rights, of which ESL will receive 27.64% allocation, assuming a very low uptake, so he would be able to purchase and oversubscribe and own a very large part of SCC for peanuts, all while injecting funds into another of his investments SHLD? Link to comment Share on other sites More sharing options...
learningfromgiants Posted October 3, 2014 Share Posted October 3, 2014 Thinking out-of-the-box. Pls feel free to blow holes through it.... Lampert is a pretty bright guy and understands SCC lack of appeal, even to current shareholders. What is the chance he is offering rights, of which ESL will receive 27.64% allocation, assuming a very low uptake, so he would be able to purchase and oversubscribe and own a very large part of SCC for peanuts, all while injecting funds into another of his investments SHLD? Looks like I didn't have my facts quite straight, ESL will receive 24.83% of rights allocation, but my question stands. Is Lampert trying to inject cash into SHLD while increasing his position dramatically in SCC at a bargain price? Link to comment Share on other sites More sharing options...
Luke 532 Posted October 3, 2014 Share Posted October 3, 2014 Bruce just amended the filing from earlier today. Earlier: http://www.sec.gov/Archives/edgar/data/1214344/000091957414005464/xslF345X03/p6153365.xml Now: http://www.sec.gov/Archives/edgar/data/1214344/000091957414005482/xslF345X03/p6153956.xml The 2nd filing removed the following footnote: 1. The securities were held in an account managed indirectly by Bruce R. Berkowitz ("Mr. Berkowitz") and were purchased pursuant to client instructions. Link to comment Share on other sites More sharing options...
wisdom Posted October 3, 2014 Share Posted October 3, 2014 Learning it is a possibility. Impossible to confirm unless someone has the opportunity to ask ESL. He did oversubscribe to SHOS and then bought some more when it dropped from what I recall. Link to comment Share on other sites More sharing options...
BTShine Posted October 3, 2014 Share Posted October 3, 2014 He also sold over 3 million shares of his SHOS when it was up in the $40s and $50s. Then he began accumulating again (only about 400,000 shares total) when the stock fell to the low $20's and teens. Link to comment Share on other sites More sharing options...
fareastwarriors Posted October 3, 2014 Share Posted October 3, 2014 Disappointment in Sears’ Latest Plan to Raise Cash http://dealbook.nytimes.com/2014/10/03/disappointment-in-sears-latest-plan-to-raise-cash/?module=BlogPost-Title&version=Blog Main&contentCollection=Breakingviews&action=Click&pgtype=Blogs®ion=Body Link to comment Share on other sites More sharing options...
alertmeipp Posted October 3, 2014 Author Share Posted October 3, 2014 What are the chances that both Eddie and Bruce being dead wrong on Sears? Link to comment Share on other sites More sharing options...
BargainValueHunter Posted October 4, 2014 Share Posted October 4, 2014 Jim Cramer on "The Potential of Sears" from 2012: -and- Interesting take from a 32 year friend of Lampert Link to comment Share on other sites More sharing options...
CorpRaider Posted October 4, 2014 Share Posted October 4, 2014 What are the chances that both Eddie and Bruce being dead wrong on Sears? I dunno but they have some elaborate and detailed ass-covering provisions in their loan participation agreement. P.S. Nice Cramer video above. He must be thrilled since he wanted it to pull back to $140 so he could buy more. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted October 4, 2014 Share Posted October 4, 2014 Bruce Berkowitz talks about Sears in 2011: http://m.gurufocus.com/news_read.php?id=137706 (Sears discussion starts ~7:25) [Listen to what he says about how he figures Sears will be divvied up around 2016 or 2017...] Link to comment Share on other sites More sharing options...
texual Posted October 4, 2014 Share Posted October 4, 2014 Everybody has their theories and predictions. What ultimately matters is ESL and what he thinks is the right course. So far he has been wrong about share buybacks, selling stores too slowly and not in enough quantity and now with Shop Your Way. He also is unable to find buyers for the pieces he wants to sell because the reputation of Sears is in decline. Not to mention he makes mostly bad headlines for lack of transparency and shrewdness which would be great if he was secretive in an Apple sense. However he hasn't done much for anybody regarding Sears. In many ways his investment in Sears peaked in 2007 when he didn't really do anything at all. With all this effort and involvement the past few years, he has honestly wasted his time. But I don't blame him, Sears was in decline many years earlier. If he was truly a Buffet fan, he would have realized that an earlier liquidation or investing elsewhere could have changed the course of this company. Maybe he has other ideas. I don't know, but he is invested fully and I don't see him or Bruce Berkowitz backing off from making this work. My thinking is that if you trust Bruce Berkowitz and I tend to believe he is smart, that Eddie is an 'economic' guy. However long he wants to give this retail turnaround a try is a mystery but eventually several things will happen that change the course of the investment. And I believe we are approaching the final part of the Sears story where Sears was a retailer being run by a investment guy. I'd love to see these two men team up and be shareholder friendly. I am also aware that we may not be coming along for the ride. I feel burned by SHLD but this has been a learning opportunity for me and fellow investors. Ultimately nobody could have predicted the last ten years for Sears and there has been a lot of discussion from brilliant people on both sides. I'm of the opinion that if ESL sees this as a way to fund his e-retailing ambitions, than you must trust him in order to be a sharehold Link to comment Share on other sites More sharing options...
texual Posted October 4, 2014 Share Posted October 4, 2014 There is a ton of value in this company but I am no longer sure who can realize it, and who will benefit or gain from it. I think Fairholme buying common stock every quarter for nearly 10 years suggests that they believe common shares are where the value will be retained. So I am comforted by that. Neither ESL or Fairholme would really allow their funds common stock to go to zero, but I could be wrong. At least Fairholme would have a lot of trouble on its hands if SHLD went to zero. Link to comment Share on other sites More sharing options...
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