Sears is an impossible short

Posted Feb 8th 2009 11:40AM by Zac Bissonnette
Filed under: Sears Holdings (SHLD)

The Wall Street Journal reports (subscription required) that short-sellers are having an impossible time locating shares of Sears Holdings (NASDAQ: SHLD) to borrow. Chairman Eddie Lampert controls about half of the company's stock through his hedge fund, making the shares difficult to borrow. For investors who are able to locate the stock, borrowing costs are running somewhere between 30% and 40% per year.

Given the difficulty short sellers are having, it seems likely that shares of the company are trading at a higher price than they would were the stock more liquid.

On the other hand, 29% of the company's float is currently sold short at those steep interest rates, indicating that a big chunk of investors are incredibly confident that Sears shares have a lot farther to fall.

Tags: Eddie Lampert, inthenews, Sears Holdings, SHLD

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Reader Comments (Page 1 of 1)

2-09-2009 @ 8:36AM

TX CHL Instructor said...

Good riddance to bad rubbish. Back when I was fresh out of college, I used to spend at least $100/month there. I bought essentially all of my clothing, appliances, and tools there. But after they ripped me off big-time on a roofing job (if I had wanted a roof that leaked, installed by illegal aliens who littered my yard with beer cans, I could have gotten it at half the price charged by Sears), I quit buying anything there. I haven't spent a dime in Sears for over 20 years now.

2-25-2009 @ 5:51PM

Ryan said...

if you holding a grudge for over 20 years then your just stupid. Sears is an excellent company who treats there employees and customers right TODAY. and i stress the word today. stop living in the past. a lot has changed in 20 years.