"Do your due diligence. Understand that this $4.4 Billion deal equates to $41/share. Yes, $41/share!"
while the math might indicate this is true in a vacuum, the reality will be different.
if you examine the global bidding procedure, if there is a winning bidder for sears as a going concern, there will be a "newco" formed. i believe in this instance that the newco will issue new shares in the new company. shares of the old company (shldq) will be exchanged for shares of the new company BUT additional shares will also be issued taking the total outstanding shares well beyond the current 122+/- million shares. therefore, any thoughts of $41/share will not pan out.
however, can not believe anyone holding shldq will cry about dilution if the current shares survive.
if this deal is approved, newco shares are issued (and current shareholders survive), i would be surprised (but very happy) if the new shares carried a price in excess of $10-12/share.
if the current shareholders survive and get shares in newco, i would rather expect a rather slow climb in the stock price (or if it comes out somewhat high, then an immediate fall off in share price). either way, i can not believe this is a long-term hold and will be very happy to pick a price to sell, get out and not look back.
lampert's track record is not good with retail and my feeling is that long-term liquidation by him will be in the cards and there is no way those 50k jobs will be preserved as one looks out 3-5 years.
AI
