Market Overview

The End Could Be Near For Sears

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The End Could Be Near For Sears

Struggling department store Sears Holdings Corp (NASDAQ: SHLD) has on many occasions expressed to investors a game-plan to turn around its business, the most recent of which came in early February and prompted a 40 percent surge in Sears' stock.

But on Tuesday night, the prospects of a long-term turnaround diminished after Sears acknowledged its future remains uncertain.

"Our historical operating results indicate substantial doubt exists related to the Company's ability to continue as a going concern," Sears said in a regulatory filing.

Not Over Yet

Meanwhile, Sears' stock remains one of the hottest stocks among short sellers as investors doubt the company can succeed in turning around its business. On Wednesday, the thesis against owning Sears' stock rose after the company's announcement, as shares of Sears were trading lower by more than 17 percent.

But Sears' turnaround plan remains in focus and the company expects to lower its debt and pension obligations by $1.5 billion. Also, selling off business segments and optimizing its real estate holdings has injected the company with much needed liquidity.

In a statement to Bloomberg, a Sears spokesman emphasized the fact that the company is "taking decisive actions to mitigate" the doubt surrounding its future outlook.

In Wednesday's pre-market session, the stock traded at $7.50, down 17.6 percent.

See Also:

Why Short Selling Is A Dangerous Game: Sears

TJX, Ross And Burlington Will Open The Same Number Of Stores Macy's, Sears And JC Penney Are Closing

Image: By Raysonho @ Open Grid Scheduler / Grid Engine (Own work) [CC0], via Wikimedia

Posted-In: Department Stores sears Sears TurnaroundNews Legal Movers Best of Benzinga

 

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