Sears Holdings Corp. (fka SHLDQ)

[alexbh2285]

SHLDQ not being offered at $.01 doesn't mean it will be here or higher in the future. This happens often with bankrupt stocks - Boston Market (the Boston Chicken company) was a great example. The stock soared when it was rumored that McDonalds was buying some of the assets. McDonalds actually did but no one but the secured creditors got paid. Institutional investors knew this but retail investors just said "Yum Yum Chicken!"

Similar to Sears where the old debt is - RIGHT NOW - offered at 7 cents on the dollar and the preferred shares are - RIGHT NOW - offered at 2 cents on the dollar. These markets are more institutional and show that these markets think / know the stock will be a zero eventually (they both obviously rank higher in a bankruptcy than the equity).

One reason why institutions don't go short to make this bet with the equity is that additional borrow is very limited and at near 100% borrow cost for the limited amount available. Thus the carry cost of being short SHLDQ is huge so it remains "inefficiently priced" at higher than 0.

Also, you can see that, for the most part, short interest has been DECREASING (at 7.4MM shares short at 4/30/19 versus 10.2MM at year end and 20.3MM at the end of the prior quarter) so it is not massive additional shorts keeping SHLDQ down.