Short Sellers Pounce on Sears Landlord -- Update
6:21 pm ET March 30, 2017 (Dow Jones)
By Esther Fung
Short sellers are betting against Seritage Growth Properties, the real-estate investment trust spun off by Sears Holdings Corp. in 2015 that holds the struggling retailer's property assets.
The so-called short interest, a measure of negative bets, on Seritage hit an all-time high of $368.5 million on Wednesday, according to S3 Partners, a financial analytics firm.
In 2016 and 2015, average daily short interest totaled $203.1 million and $80.7 million, respectively.
"One might look at Seritage Growth Properties as an alternative short play to indirectly gain exposure to Sears' demise," said Matthew Unterman, a director at S3 Partners.
In a short sale, an investor borrows shares of a company and sells them, in hopes of buying the shares later, at a lower price, to repay the loan and pocket the difference. Short interest tracks the number of shares that have been sold short but not repaid.
About 8.65 million Seritage shares have been sold short, or roughly 35% of the company's publicly traded shares.
Seritage declined to comment.
In a securities filing last week, Sears Holdings raised doubts about its ability to stay in business after seven years of losses.
