Sears Holdings Corp SHLD was briefly halted Tuesday morning after the stock surged more than 14 percent and triggered its volatility circuit breaker. The large move was driven by a report from Bloomberg that the company is accepting bids for its Craftsman business through the end of October.
The report also claims that Stanley Black & Decker, Inc. SWK and China’s Techtronic Industries are among the interested bidders. Offers for Craftsman could reportedly approach $2 billion.
Sears reported back in May that it was “exploring options” regarding Craftsman, but Tuesday’s report provided a bit of clarification for shareholders.
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Sears has been one of the worst-performing stocks in the market in recent years. Despite Tuesday’s spike, the stock remains down 37.5 percent in 2016 and down 92.0 percent in the past 10 years. Sears is one of many brick-and-mortar retailers that has failed to find a viable strategy to combat the rise of e-commerce competitors like Amazon.com, Inc. AMZN.
In fact, Sears’ struggles could ironically be one of the major drivers of Tuesday’s big gain. As of late September, Sears was the single most heavily-shorted stock in the entire Russell 3,000. There’s certainly a lot of short covering in the mix on Tuesday following the Craftsman news.
Sears short interest may continue to decline throughout the month considering the uncertainty associated with a potential Craftsman bidding war.
image: Mike Mozart, Flickr
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