fcharlie

Credit Markets Overstate Sears Bankruptcy Risk

Nice to see an article that presents the asset and liquidity situation with facts instead of the typical article that picks and chooses specific metrics that do not directly affect solvency, such as same store sales, and the appearance of stores, etc...

It's worth mentioning that even as Same store sales declined every single quarter from 2005-2007, SHLD generated more free cash flow than it's current market cap. And it's also worth mentioning that SHLD has $10 billion of inventory, $7 billion of which is fully paid for and owned, which secures it's $4 billion dollar revolving credit line. To the extent that SHLD may have difficulty renewing or extending it's credit line in 2010, you would have to assume that Lampert has a backup plan already, and I don't see any reason why his own hedge fund couldn't extend a line of credit to SHLD. He will do whatever is necessary to insure the solvency of his company.