Sears Holdings Corp. (fka SHLDQ)

[DIDDY28]

No one is made Whole in a bankruptcy. The creditors had to settle for a fraction of their balances owed. The equity holders will also have to settle for a fraction of their original investments. If you purchased Sears stock 10+ years ago at over $140 per share; you are going to be absolutely disappointed with the settlement but if you are buying at .30 cents a share I believe you will be handsomely rewarded. In the beginning and end, Sears filed for chapter 11 bankruptcy (reorganization) NOT liquidation also known as chapter 7:

https://www.hg.org/legal-articles/what-are-the-differences-between-chapter-7-and-chapter-11-bankruptcies-47964

I believe the “old” shareholders also known as SHLDQ will end up with a minority share of the “New Sears.” What percent that will entail will have to be settled in court. Maybe 3%, 5%, 10% who knows maybe even 20%. That is what will determine what SHLDQ shares are worth. Sears is headed to court to file a petition to emerge from bankruptcy in the near future. This matter regarding SHLDQ shareholders will need to be resolved prior to that. That is why we are not even close to resolving these matters yet. In my opinion along the way, there will be many surprises that will make the stocks price POP in value.

Here is some basic math to ponder.......

Let’s say Sears is valued at $5.2 Billion (since that is what Eddie Lampert recently paid for it).
If the court decides that the old equity holders (SHLDQ) are entitled to 10% of the company, this is what the math could look like:

Sears Value.................$5,200,000,000
10% SHLDQ...................$520,000,000
Outstanding shares..........109,000,000

$520,000,000 / 109,000,000 = $4.77 per share

This in my opinion is a very likely scenario on the table. So yes, if you bought your shares at $140 a share you are going to the cleaners. But at the same time, if you were one of the Savvy investors who bought in at .28 cents a share (current price) you could make out with a possible 15 bagger. All these numbers are all hypothetical at this point but these matters must be resolved prior to Sears emerging from bankruptcy. SHLDQ holders own over a Billion dollars of valuable NOL’s that Eddie Lampert has always had his eyes on. October brings a lot of court proceedings and thus the possibility for major fireworks. Exciting times ahead.

In my opinion the upside far outweighs the downside at current share prices.


Go SHLDQ













As always jmho