After what feels like forever, Sears (SHLD) has finally scheduled a date for its second quarter results. My put options I recently purchased are all riding on the September 13th (Am I the only one that finds it rather ominous to report on the 13th?) earnings release. We’ve seen a ton of volatility this month, but I am holding strong that Q2 offers nothing but bad news. Barring the announcement of a Kenmore deal, I really think we’re going to see a dire cash position going into the holiday season. The one possibility I do see is Eddie Lampert funneling more of his hedge fund money into the company through loans, in order to keep it running while he tries to acquire Kenmore.
Personally, I think the PBGC will finally step in and block Lampert from siphoning any more assets. The company is clearly on life support, and it will undoubtedly need the Kenmore assets in order to cover at least some of the company’s pension plan liabilities in the event of bankruptcy. Of course, Lampert doesn’t care about that. He wants to leave nothing behind. I’ve never made it a secret that I’m not a fan of the man. He bought Sears Holdings, and ran it into the ground. Furthermore, he’s spent years keeping it alive just so he could raid the assets and funnel them into outside enterprises that he could profit from, all the while leading shareholders to believe a turnaround was actually possible. A hedger he might be, but a businessman he is not.
I’ve written so many times about the way real estate has been moved to Seritage Growth Properties (SRG); I’m not going to bother with that this time. We’re past that. We all know that Sears in trouble long term. I’m not even rooting
