OT: IS SHLD A PLAY IN BK?

[littlede...@gmail.com]

Yay or Nay?

BTW, the Sear Tower has been renamed to the Willis Tower....and da locals call it DA BIG WILLY.....HEHEHAHA.......go figure....devil

[Duncan Macleod "Beta"]

that is hysterical-  

Da big Willy!!

Prophetic- or is it prophelactic?

[Smile]

LD, 

Young whippersnapper here. Been lurking a long time. Love it all, love you all. Especially when you guys insult mr. Maloni, even if I have no bloody clue what that is all about! Pfd, common, whatever. I own both, albeit in absolute amounts which would make you smile and pat my head. I think utility model is most likely, especially given the recent moves in the right direction by the pharizee white papers. Tim Howard is the emperor of his domain- unfortunately he's not the one who decides politics.

To me, FnF's like a sort of financial elephant which has been shot by politicians and interested parties so many times it should've rolled over and died a long time ago. However, she refuses to, because she is a financial elephant- in fact, she is the toughest financial elephant in the woods... she should've been set up by private capital in 1938 but didn't because the pharisees were too busy playing nine holes to snap her up until way past 1985. By then, they needed to conjure up a dark twin just to beat her, which they finally got, but the twin died in 2008 and now the elephant named FnF is still alive and of course she's being blamed because the twin is nowhere and the woods are in shambles.

On to Sears.

I understand zipzilch of Sears' subsidiaries. Done some DD but not enough. I may be missing something. I may be a strange dumbass (nah, that's a given). Here's my first take.

 There seem to be three rough camps:

 - shallow "they're dying bwaaaa" people

 - shallow "RE play" / "he's going to be baby buffett #65" people who would never have invested without berkowitz and didn't do DD.

 - people who actually understand what's in there, and how it's structured, to the letter. These might be rare.

EL sold stores consistently, sold Craftsman well and EL/BB own the largest part of equity (77) and debt (50). It seems to be getting sold off the right way, but there's this tension between EL being a wobbly guy on the manager front and EL being a very smart liquidator on the investor front. What do you think? Could be both. He might be giving it all he's got, wringing out what he can, before deploying the masterplan. He might be a something-or-other who overestimated himself and his insight in loyalty programs/online retail. Probably in the middle, where the truth so often resides. I kind of understand the SYW move, ideally he might end up with a bunch of small buildings as service points and get taken over by amazon prime. What's more likely is that he wrings out what he can before closing physical stores then lets it die.

So.

In case of BK: Swap debt to equity, or merger with ESL/SRG? What about pensions and political/personnel liabilities? Latter might just be the reason for Buffett holding off and putting it in Seritage. I understand size argument (for Buffett not going for Shld) but Seritage is small too. But why BK? Why go through all that mess to attain 50 of 70 and give bondholders a seat at the table you don't want them to have? Or: what about Cascade/Bill Gates ?

More importantly: what is inside of SHLD and how does the structure affect the play to produce a good outcome? How does the 747 that is SHLD make a rough landing and lay off its operating personnel intact, and how does the plane get converted into a small cessna that can soar with the airbuses again? What am I missing? It's turned out to be more complicated than I thought. Especially for a dying retailer.

Any of this might be completely wrong, and I'm feeling intimidated just leaving this post with y'all rockstars. Anyway, I realize I'm now asking you questions instead of saying yay or nay, so I really hope you'll help me to......go figure.....

[seysmont]

Sears is all commercial real estate. Retail doesn't want all that R/E. On the spreadsheet basis Sears was worth a fortune. Untold fortune. But to sell all of that is impossible. So they will BK retail operations to separate themselves from liabilities and become a REIT and try to monetize all that property Sears amassed. Here is the thing, though. I think the stars of property portfolio had been sold off already. There are properties that will probably be worthless. And now the new, not really new, but new in no need for retail space. Before Sears R/E was unsuitable for other similar retailers. Now retailers may not be interested in that much space to begin with. Sears properties were always different from other retailers. So the question is how will the resulting REIT monetize the R/E pile it's sitting on. With Retail not needing all the space it may get harder. For all I know they can try with AMZN as AMZN may act as an anchor and utilize the Sears unique R/E. But who knows about their relationships. They need to monetize atypical retail space in size. Convert, do whatever with it. The stars of the properties are long gone, because Lampert tried to sell individually the stores. I'm sure the spreadsheet model still shows a lot of money. The question is how will it be monetized, because so far it's been not going well. They need to reinvent the Sears malls, because other retailers didn't need them. There are too many of them too.

[neo]

@Smile...grin ear to ear my good man...you acquitted yourself well with your Freshman post...advance to the upper classes, but beware, there are some hazers on these boards - keep the hairy eyeball out fer that Maloni feller and his alter ego, n'er-do-well, minion Crown Jewels:-)

[Crownjewels]

NEO--You're half right.

Maloni is an outrage waiting to happen.

Ask MrF about the last time our midwestern friend lent Maloni his wife and his car; neither came back as they left, although MrsF was smiling/grinning??

On the other hand, CJ is a near saint and likely soon will be recognized by the Church/Pope for all of his work with young wayward Catholic women...and some older ones, too..

[littlede...@gmail.com]

Hold dat thought on Sears...will comment when da devil can...hopefully soooon....go figure....devil

[littlede...@gmail.com]

It is true that all the premium RE assets were spun off.  But, there is still a good chunk of middle grade to good assets with SHLD.  Even the less attractive assets are worth money.   The idea here is to see if whatever we invest in going into BK can emerge or make money.  Like FnF, I am not going to invest in a BK SHLD to save it.  The question is can you make money and get out.  I think I can.  The SHLD BK is not a "I am full of red ink and I cant recover BK".  It will IMO be a BK of "Going in for a quick shower and wash off the Retail burden and emerge in a Leaner online/showcase business".  IMO the reorged Sears will be niche to a few strong product.  That will be their new base to build on......go figure...devil

[littlede...@gmail.com]

It would not be a liquidation.  IMO, it will be a reorg....take a bath, come out leaner and meaner.....go figure..devil

[littlede...@gmail.com]

You know what da devil is liking.....GOOD OLD FASHION COLD HARD ASSETS!.......Booooooooom.......dey like virtual mez like hard assets.......BK dis baby and MOMO club moving me......Da 4 trades on shld is about it....da last one was good....but no no buy in now until we see a bit of fuzzy direction....NO NO want to give some monies back........

Da devil  is vintage....have a solid watch collection...collects books.....have a solid record and CD collection.....de devil picked up 200 DVDs from a goober for free last week....da goober uploaded all his movies and wants to get rid of dem....ok ok....da devil take it.......Da law books and Encyclopedias and various books is filling up da house and library/office quite nicely........da devil have 2 1830s bibles (decoration and investment)...da devil preached to goober.....hope dey listen......books books boooks.......go figure..devil

[seysmont]

I think BK discount alone will make money on SHLD. It's unclear what happens longer term. There is this old retailer that went BK and became a REIT and is worth multiples of it's heyday valuation now as a REIT. Its NYSE:ALX, I haven't really looked into details, but that was a sick trade. I think it worked because of NYC. But Sears has issues with its properties. And the problem is yes, they are worth money, but who will pay for them? So far the jewels were picked out, but the run of the mill Sears locations lack retail interest. It's not going to be conventional retail using those properties, that's for sure. Something needs to change for them. Either attract different businesses or repurpose the space. It's not trivial. My bet would be on repurposing. But then we would hear about from Lampert, and it would need more money. Unlocking the value is the trick in SHLD. SRG has SHLD as a renter, so that doesn't help either. You want Lampert to offer some plan as part of BK reorg as what will happen. The opportunity was clearly lost already. He had the money to repurpose the space before, and he went with retail "supporting" the properties. The question is what can you do with the mall that was Sears. Office space, maybe storage space. Retail will not want those locations.

[littlede...@gmail.com]

seysmont.....overdinking is also no no good.....Da devil is not greedy.....3 months or under for 400% gains.......Reorg will be quick.....


Da devil can guess da plan wit some lvl of accuracy......

1.  close 95% of stores
2.  restructure/shed debt/stop cash burn
3.  5% of stores will reorg lean and sell top remaining brands at those locations and online.  NO jeans...no cloths....no cosmetics....etc. etc...none of dat outdated cloths Ron buys from Sears
4.  Manage Properties

no no need lampert to tell da devil anyding....we just need lampert to take us to BK so we can make monies....we aint here to save Sears dat is lampert's job.....make da monies and get out....go figure...devil

[seysmont]

I think if there was a clear path to managing properties, they would have BKd a while ago. That's the biggest issue of SHLD of what to do with all that R/E. They have stores in the ones they couldn't rent out. That's the issue, really. That's also the main reason they didn't file yet. At this point it's cheaper for them to continue supporting the stores by having Sears in them. You tell me what are they going to do with all those stores they couldn't unload in all those years. They are worth something, there are just no buyers and no renters for them, but otherwise they are definitely worth something. 

[littlede...@gmail.com]

NO goober...Sears burn more cash than they pay rent or potential rent......da main issue is da cash burn from operations....Da RE will work itself out.....Anyways...BK is what we want.....we aint here to save SEARS.....If BK right, Lammy can turn Sears around in a new REIT based lean retail, strong online business.....

Dey close da stores....you mean da property?......go figure...devil

[littlede...@gmail.com]

Oil (I like uso) and shld established a good trading pattern. Is anyone trading oil? I like oil better as a trade but shld is also good. I estimate a good 30% return on trading these 2 this summer....do your dd and as always....go figure...devil