- The bull argument of Sears Holdings (SHLD -2.7%) having access to its real estate took a major blow with the $400M loan backed by Eddie Lampert, and secured with 25 locations, says Credit Suisse's Gary Balter, reiterating his Underperform rating and $20 price target.
- "All of a sudden, as a vendor, one has to ask if cash flow is that tight that ESL needs to lend the money," says Balter. "And why is it taking first dibs on so-called valuable real estate if that was what the vendors had counted on if things further deteriorate?"
- Balter isn't sure Sears' asset value is greater than the stock price, but he is sure this is not the case if shareholders can't get at those assets. If the assets are worth as much as the bulls say, the best move is to liquidate now as operations are taking more than $10 per share in value away every year.
- Previously: Sears Holdings lower after Lampert cash infusion