Parsad Posted October 17, 2017 Share Posted October 17, 2017 This thread is nearly a thousand pages. How many case studies could do that or provide such detail! That's why I created these for each idea or stock. Cheers! Link to comment Share on other sites More sharing options...
scorpioncapital Posted October 17, 2017 Share Posted October 17, 2017 One thousand pages is a case study of one thing for me : what a too hard pile looks like ! Link to comment Share on other sites More sharing options...
DamienC Posted October 17, 2017 Share Posted October 17, 2017 Lots has been said about the recent decision from Bruce Berkowitz to leave the Sears board. Looking at the Fairholme latest 13D and comparing it with its last in 2016, it seems that he has now the sole dispositive power of almost 2.6 Mio shares compared to 913k back then. IN a form 4 last week it was said he had a bit more than 700k shares. https://www.sec.gov/Archives/edgar/data/1056831/000091957417007315/d7683881_13d-a.htm previous 13d https://www.sec.gov/Archives/edgar/data/1056831/000091957416013681/d7186510_13d-a.htm Anyone has any idea of what is happening here? Is my interpretation that he now personaly holds those 2.6 mio shares correct? Thanks for your input Link to comment Share on other sites More sharing options...
Greyhound Posted October 17, 2017 Share Posted October 17, 2017 Lots has been said about the recent decision from Bruce Berkowitz to leave the Sears board. Looking at the Fairholme latest 13D and comparing it with its last in 2016, it seems that he has now the sole dispositive power of almost 2.6 Mio shares compared to 913k back then. IN a form 4 last week it was said he had a bit more than 700k shares. https://www.sec.gov/Archives/edgar/data/1056831/000091957417007315/d7683881_13d-a.htm previous 13d https://www.sec.gov/Archives/edgar/data/1056831/000091957416013681/d7186510_13d-a.htm Anyone has any idea of what is happening here? Is my interpretation that he now personaly holds those 2.6 mio shares correct? Thanks for your input Bruce only received 727k of SHLD shares from the wind up of the hedge fund. Where did the rest come from (difference between 2.6m and 727k)? Could he have acquired them from his investors without filing a form 4? Link to comment Share on other sites More sharing options...
Eye4Valu Posted October 17, 2017 Share Posted October 17, 2017 This is going to sound quite contrary in light of all the speculation regarding Bruce's departure, and the market reaction, but I think it's actually bullish for SHLD. I don't interpret it as FAIRX bailing on the investment. Rather, Bruce provided his input to the board, the input has been acted upon as part of the restructuring, and he sees no reason to continue on the board. The main test will be whether SHLD can return to profitability as a result of the restructuring. Bruce stated that no one will believe SHLD is capable of this until they actually see it. Time will tell. Link to comment Share on other sites More sharing options...
DamienC Posted October 17, 2017 Share Posted October 17, 2017 Confirmed that Bruce Berkowitz now holds 2.6 mio shares personally. Seems evident but I prefer to ask and look like an idiot instead of missing something... If M. Berkowitz sells some of its personal shares (even after he left the board) he will still need to file his transactions to the SEC, right? Thanks Link to comment Share on other sites More sharing options...
Greyhound Posted October 17, 2017 Share Posted October 17, 2017 Confirmed that Bruce Berkowitz now holds 2.6 mio shares personally. Seems evident but I prefer to ask and look like an idiot instead of missing something... If M. Berkowitz sells some of its personal shares (even after he left the board) he will still need to file his transactions to the SEC, right? Thanks He will fill them through the 13G but not form 4 Link to comment Share on other sites More sharing options...
DamienC Posted October 17, 2017 Share Posted October 17, 2017 thank you Link to comment Share on other sites More sharing options...
BeerBBQ Posted October 17, 2017 Share Posted October 17, 2017 This is going to sound quite contrary in light of all the speculation regarding Bruce's departure, and the market reaction, but I think it's actually bullish for SHLD. I don't interpret it as FAIRX bailing on the investment. Rather, Bruce provided his input to the board, the input has been acted upon as part of the restructuring, and he sees no reason to continue on the board. The main test will be whether SHLD can return to profitability as a result of the restructuring. Bruce stated that no one will believe SHLD is capable of this until they actually see it. Time will tell. Seems like he is telegraphing that he has been successful re: his concerns http://www.fairholmefundsinc.com/Bulletin/SHLDstatement20171017.pdf "... I believe that I have achieved that objective, and was pleased to have the opportunity to assist in developing the company’s strategic restructuring program, which was announced earlier this year." Link to comment Share on other sites More sharing options...
dyow Posted October 17, 2017 Share Posted October 17, 2017 Lots has been said about the recent decision from Bruce Berkowitz to leave the Sears board. Looking at the Fairholme latest 13D and comparing it with its last in 2016, it seems that he has now the sole dispositive power of almost 2.6 Mio shares compared to 913k back then. IN a form 4 last week it was said he had a bit more than 700k shares. https://www.sec.gov/Archives/edgar/data/1056831/000091957417007315/d7683881_13d-a.htm previous 13d https://www.sec.gov/Archives/edgar/data/1056831/000091957416013681/d7186510_13d-a.htm Anyone has any idea of what is happening here? Is my interpretation that he now personaly holds those 2.6 mio shares correct? Thanks for your input Yes it looks like he owns 2.6M. Link to comment Share on other sites More sharing options...
dyow Posted October 17, 2017 Share Posted October 17, 2017 This is going to sound quite contrary in light of all the speculation regarding Bruce's departure, and the market reaction, but I think it's actually bullish for SHLD. I don't interpret it as FAIRX bailing on the investment. Rather, Bruce provided his input to the board, the input has been acted upon as part of the restructuring, and he sees no reason to continue on the board. The main test will be whether SHLD can return to profitability as a result of the restructuring. Bruce stated that no one will believe SHLD is capable of this until they actually see it. Time will tell. Seems like he is telegraphing that he has been successful re: his concerns http://www.fairholmefundsinc.com/Bulletin/SHLDstatement20171017.pdf "... I believe that I have achieved that objective, and was pleased to have the opportunity to assist in developing the company’s strategic restructuring program, which was announced earlier this year." You guys are correct. Link to comment Share on other sites More sharing options...
Parsad Posted October 17, 2017 Share Posted October 17, 2017 This is going to sound quite contrary in light of all the speculation regarding Bruce's departure, and the market reaction, but I think it's actually bullish for SHLD. I don't interpret it as FAIRX bailing on the investment. Rather, Bruce provided his input to the board, the input has been acted upon as part of the restructuring, and he sees no reason to continue on the board. The main test will be whether SHLD can return to profitability as a result of the restructuring. Bruce stated that no one will believe SHLD is capable of this until they actually see it. Time will tell. Seems like he is telegraphing that he has been successful re: his concerns http://www.fairholmefundsinc.com/Bulletin/SHLDstatement20171017.pdf "... I believe that I have achieved that objective, and was pleased to have the opportunity to assist in developing the company’s strategic restructuring program, which was announced earlier this year." You guys are correct. You guys really think that in this retail environment, and at this place in time, somehow Berkowitz and Lampert have fixed Sears and stemmed its burn rate? You guys know that Sears Canada just went under, right? Is there anything that springs to mind on why or how Sears U.S. is going to incur a different fate? This thing has been a black hole for well over a decade now. There is no end in sight where it doesn't continue sucking all of the money in the universe! Cheers! Link to comment Share on other sites More sharing options...
DTEJD1997 Posted October 18, 2017 Share Posted October 18, 2017 How SHLD does not go "Super Duper Bankrupt" totally escapes me. It is only a question of time. On the radio today there were more announcement of Sears & Kmarts closings. At this point, when these stores get closed next year, I will be hard pressed to think of more than 2 operating Sears in my area. The K-Mart near me will be closing in early 2018. When that one goes, I can't think of another one operating near me. I get "Shop your way" spam multiple times a day. They send me advertising for stuff that I have never bought, i.e. little girls clothing. I have never bought ANYTHING there to indicate that I have children, or buy stuff for children... Frequently, they also send me crazy coupons like "Spend $10 or more and get $10 off your bill"....which can be combined with existing sale stuff. If one were inclined to buy stuff there, you might be able to save some krazy $$$$. I don't see how they can even begin to make money and how they can even BEGIN to turn their retail operations around. Thus, I predict "super duper bankruptcy" in the near future... Link to comment Share on other sites More sharing options...
dyow Posted October 18, 2017 Share Posted October 18, 2017 This is going to sound quite contrary in light of all the speculation regarding Bruce's departure, and the market reaction, but I think it's actually bullish for SHLD. I don't interpret it as FAIRX bailing on the investment. Rather, Bruce provided his input to the board, the input has been acted upon as part of the restructuring, and he sees no reason to continue on the board. The main test will be whether SHLD can return to profitability as a result of the restructuring. Bruce stated that no one will believe SHLD is capable of this until they actually see it. Time will tell. Seems like he is telegraphing that he has been successful re: his concerns http://www.fairholmefundsinc.com/Bulletin/SHLDstatement20171017.pdf "... I believe that I have achieved that objective, and was pleased to have the opportunity to assist in developing the company’s strategic restructuring program, which was announced earlier this year." You guys are correct. You guys really think that in this retail environment, and at this place in time, somehow Berkowitz and Lampert have fixed Sears and stemmed its burn rate? You guys know that Sears Canada just went under, right? Is there anything that springs to mind on why or how Sears U.S. is going to incur a different fate? This thing has been a black hole for well over a decade now. There is no end in sight where it doesn't continue sucking all of the money in the universe! Cheers! We will find out this year - I think to really give a thoughtful answer here personally I have to see the results in Q3/Q4. The problem here is Eddie does not communicate enough, he has not clearly outlined how the restructuring is going to impact the business. The question is whether they can maintain the same level of profitability (or losses) as sales drop and as the restructuring is implemented. If yes, then the restructuring works. If no, it doesn't. I looked at the some document in the court filings for sears canada - apparently the bankruptcy filing was done without consulting Bruce and Eddie - it caught them off guard - and Sears Canada was stopping them from getting access to documents. Something happened there is not so clear. I even heard tin foil hat stuff: that Stranzl was behind this bc he wanted to bid for the assets and get them for cheap (who knows there could be an element of truth here). Either way whatever happened there was strange. Eddie and Bruce had no involvement in Sears Canada - and Sears Canada tried to rebrand itself/they updated stores - they used the opposite approach of Eddie (ignore the stores and focus online) and now they are gone. Besides this Sears Canada had no assets besides real estate (and the Canadian market is less liquid/has less buyers). Sears Holdings is a very different business with different assets and a different strategy. Link to comment Share on other sites More sharing options...
Guest longinvestor Posted October 18, 2017 Share Posted October 18, 2017 This is going to sound quite contrary in light of all the speculation regarding Bruce's departure, and the market reaction, but I think it's actually bullish for SHLD. I don't interpret it as FAIRX bailing on the investment. Rather, Bruce provided his input to the board, the input has been acted upon as part of the restructuring, and he sees no reason to continue on the board. The main test will be whether SHLD can return to profitability as a result of the restructuring. Bruce stated that no one will believe SHLD is capable of this until they actually see it. Time will tell. Seems like he is telegraphing that he has been successful re: his concerns http://www.fairholmefundsinc.com/Bulletin/SHLDstatement20171017.pdf "... I believe that I have achieved that objective, and was pleased to have the opportunity to assist in developing the company’s strategic restructuring program, which was announced earlier this year." You guys are correct. You guys really think that in this retail environment, and at this place in time, somehow Berkowitz and Lampert have fixed Sears and stemmed its burn rate? You guys know that Sears Canada just went under, right? Is there anything that springs to mind on why or how Sears U.S. is going to incur a different fate? This thing has been a black hole for well over a decade now. There is no end in sight where it doesn't continue sucking all of the money in the universe! Cheers! +1 The good investors, Lynch as an example, get around to the companies they own, stay in hotels, buy in stores etc. There are posters here who apparently don't do anything like that. If you had shopped Sears over the past decade or longer, you would know everything you needed to know to take your money far away. Keeping your eyes and ears open come before reading arcane financial documents. Fixing the unfixable, that's what Sears looked like. Link to comment Share on other sites More sharing options...
Liberty Posted October 18, 2017 Share Posted October 18, 2017 Whether Sears is fixed or not won't be divined by doing exegesis on Lampert and Berkowitz's comments, that's pointless. Might as well ask the barber if you need a haircut. Go visit a few Sears stores, go visit their website, ask people you know if they shop there, shop there yourself and be honest about the experience, etc. Then look at the financials and the competition, what kind of operational levere/deleverage they're experiencing, at what rate the ice cube is melting, etc. That'll tell you a lot more. Link to comment Share on other sites More sharing options...
BeerBBQ Posted October 18, 2017 Share Posted October 18, 2017 A little exegesis (as futile as it may be) for why Bruce resigned from board: Berkowitz believes that SHLD’s “vast asset base” has “enormous value” and that it is “imperative to promptly return to profitability” in order to fully capture the remaining value. He says he assisted with the company’s strategic restructuring program which obviously is related to his concerns of not moving quickly enough (after 10 years, better late than never) to monetize the assets that are left and being too slow on shutting down unprofitable stores. The first priority of these two objectives appears to be more aggressively shutting down the unprofitable stores because he said that he told the board prior to joining “that eliminating the cash burn will do more to optimize the value of Sears’ assets than any other action…”. Also, in his June conference call he said “There’s no doubt, returning to profitability is the most important action because when you do that, time becomes the company’s friend and the returns should increase. So time becomes very positive when you return to profitability. You’re also going to get a better look at the assets of the company once the concerns about lack of profitability are extinguished. People will be able to focus on the assets of the company and understand what’s truly there. And of course, I believe the value of assets that are transacted will improve. But clearly, extinguishing the loss will put the company in a better negotiating position for its asset base. In fact, it’ll put it in a better negotiating position with vendors and all others. So returning to profitability is key and the time is now.” The pace of store closures has clearly accelerated this year. While the company has still shown net losses in the first two quarters of this year, those losses are half the amounts shown in previous years. I’m guessing that the next quarter report will show even more improvement on that front. Taking him at his word that he achieved his objective seems to indicate that he was successful in communicating his thoughts on the proper course forward and those thoughts are encompassed in the restructuring program which is geared towards eliminating the cash burn. Thus, his departure from the board is probably not because he is throwing in the towel and more likely due to his satisfaction that the path forward is in line with his thoughts and recommendations. So do I think SHLD is fixed? No. Do I think there is an urgency today that has been lacking for the past decade to eliminate the cash burn? Yes. Link to comment Share on other sites More sharing options...
Eye4Valu Posted October 18, 2017 Share Posted October 18, 2017 In all due respect, why would we not take all comments posted on this board with a grain of salt as well? Do you all claim to know more about Sears than Eddie and Bruce? I strongly suspect you probably don't, and neither do I. Can you all prove that the cash burn hasn't been voluntary? Will no retailer survive the carnage except Amazon, with its excessive valuation? I think the quote from Horace's Ars Poetica may be applicable here. "Many shall be restored that are now fallen, and many shall fall that are now in honor." Link to comment Share on other sites More sharing options...
jmp8822 Posted October 18, 2017 Share Posted October 18, 2017 In all due respect, why would we not take all comments posted on this board with a grain of salt as well? Do you all claim to know more about Sears than Eddie and Bruce? I strongly suspect you probably don't, and neither do I. Can you all prove that the cash burn hasn't been voluntary? Will no retailer survive the carnage except Amazon, with its excessive valuation? I think the quote from Horace's Ars Poetica may be applicable here. "Many shall be restored that are now fallen, and many shall fall that are now in honor." Do you own SHLD stock? How long have you owned it? Losses, realized or unrealized, are painful. It can be difficult to know when to sell and when to arrive at the conclusion that there was a mistake. Link to comment Share on other sites More sharing options...
BTShine Posted October 18, 2017 Share Posted October 18, 2017 In all due respect, why would we not take all comments posted on this board with a grain of salt as well? Do you all claim to know more about Sears than Eddie and Bruce? I strongly suspect you probably don't, and neither do I. Can you all prove that the cash burn hasn't been voluntary? Will no retailer survive the carnage except Amazon, with its excessive valuation? I think the quote from Horace's Ars Poetica may be applicable here. "Many shall be restored that are now fallen, and many shall fall that are now in honor." Do you own SHLD stock? How long have you owned it? Losses, realized or unrealized, are painful. It can be difficult to know when to sell and when to arrive at the conclusion that there was a mistake. Good points made on this board over the last 24 hours. Investing is a mentally challenging practice. It is entirely possible SHLD goes to $0. And it is entirely possible SHLD goes up from here. I watched WTW go from $80 to $4 and now back to ~$50. One could've made arguments for WTW stock going to $0 or $80 at all points along the way. Overall, I think the people on this board attempt to be open minded and fair to well thought our conclusions. Link to comment Share on other sites More sharing options...
randomep Posted October 18, 2017 Share Posted October 18, 2017 Good points made on this board over the last 24 hours. Investing is a mentally challenging practice. Investing isn't all that hard if you know of and use a too-hard pile...... Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted October 18, 2017 Share Posted October 18, 2017 Good points made on this board over the last 24 hours. Investing is a mentally challenging practice. Investing isn't all that hard if you know of and use a too-hard pile...... I disagree - Even with much self confidence and a ton of data - watching something that you "know" is worth $15 and trading at $9 go to $7, and then $5, and then $3 over two years is enough to make anyone second guess themselves - particularly if you were adding and losing more $ the whole way down. It recovered though - so I feel much better about it :) Link to comment Share on other sites More sharing options...
benhacker Posted October 24, 2017 Share Posted October 24, 2017 From earlier, I said: I think the debt is the bigger class here and you need to have a pretty strong feel for it if you are going to be playing the options / stock. You have 3 (basically) publicly tradable classes. '17 SRAC '18 Secured HoldCo '19 Unsecured HoldCo And '28 - '43 SRAC SRAC is rated above HoldCo debt, and Secured HoldCo is above SRAC. All debt is 1 rating apart... Long term SRAC trading at 40% of par, near term issues trading from 87-95% of par (through '19). Given the above information, the market is saying *strenuously* that a filing won't happen soon (through '19). If it did, you could create a crazy trade -- short front end debt and long long term debt which would experience extreme pricing convergence upon a filing.... amazingly, this trade would be massively positive carry as well. I hear you on the puts and doing what makes sense and picking your spots; but given the capital structure pricing today it's a very very inefficient way (my opinion) to express your view which while common on this board appears to be very divergent from debt securities' market participants. Clearly the pricing could be due to yield / liquidity, or just plain insanity... but I think it's worth Sears bears doing a lot of work on the debt if you think a filing is imminent. I may short the '19's just to hedge out my much higher yield SRAC position (given SSRAP structure, that would be a seriously dirty hedge though). Just some thoughts. Good luck (actually, I take that back...) Just to flash back. The trade I proposed (long >'28 SRAC, short '19 HoldCo) has strongly converged. SRAC up 10% (now at $45) and '19 HoldCo down ~30% (now at $60). SHLD common unchanged basically so the way to play SHLD filing (which is more likely now) was not puts (at least in this reality). Not picking on Walt who's view was clearly articulated, just thought it was an interesting follow up given the bizarre nature of the Sears discussions and business over time. :) Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted October 24, 2017 Share Posted October 24, 2017 From earlier, I said: I think the debt is the bigger class here and you need to have a pretty strong feel for it if you are going to be playing the options / stock. You have 3 (basically) publicly tradable classes. '17 SRAC '18 Secured HoldCo '19 Unsecured HoldCo And '28 - '43 SRAC SRAC is rated above HoldCo debt, and Secured HoldCo is above SRAC. All debt is 1 rating apart... Long term SRAC trading at 40% of par, near term issues trading from 87-95% of par (through '19). Given the above information, the market is saying *strenuously* that a filing won't happen soon (through '19). If it did, you could create a crazy trade -- short front end debt and long long term debt which would experience extreme pricing convergence upon a filing.... amazingly, this trade would be massively positive carry as well. I hear you on the puts and doing what makes sense and picking your spots; but given the capital structure pricing today it's a very very inefficient way (my opinion) to express your view which while common on this board appears to be very divergent from debt securities' market participants. Clearly the pricing could be due to yield / liquidity, or just plain insanity... but I think it's worth Sears bears doing a lot of work on the debt if you think a filing is imminent. I may short the '19's just to hedge out my much higher yield SRAC position (given SSRAP structure, that would be a seriously dirty hedge though). Just some thoughts. Good luck (actually, I take that back...) Just to flash back. The trade I proposed (long >'28 SRAC, short '19 HoldCo) has strongly converged. SRAC up 10% (now at $45) and '19 HoldCo down ~30% (now at $60). SHLD common unchanged basically so the way to play SHLD filing (which is more likely now) was not puts (at least in this reality). Not picking on Walt who's view was clearly articulated, just thought it was an interesting follow up given the bizarre nature of the Sears discussions and business over time. :) Or it was to be selling them ;) Link to comment Share on other sites More sharing options...
BeerBBQ Posted October 24, 2017 Share Posted October 24, 2017 SHLD common unchanged basically so the way to play SHLD filing (which is more likely now) Why do you think a filing is more likely now? Link to comment Share on other sites More sharing options...
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