Sears Holdings: The Confidence Unwind

On September 28, 2018, we said that “Delisting and Bankruptcy Await.”  On October 10, 2018, it was reported in Bloomberg News that there is talk of Sears filing bankruptcy as early as October 13, 2018.

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If we look at the price of Sears on September 28 2018, almost anyone could make the claim that Sears was facing delisting and bankruptcy.  After all, by that time, SHLD was trading below a dollar and had fallen –86% in the last year.  So it was no feat of epic proportions to claim that SHLD was on its deathbed.

However, when Sears was trading above $30, we said the following:

        • "Sears Holdings (SHLD) on the other hand has been worth avoiding as the stock has declined as much as –42% and is currently down –18%.  SHLD has rebounded to some extent but continues to be too hot to handle in our opinion.”
        • "The worst performing stock was Sears Holdings (SHLD).  Sears has essentially traded with descending peaks since 2007 with price support at around $30.  A break below $30 could result in significant loss for any remaining shareholders.  Private equity firms must be circling Sears at the prospect of a decline below the long-term support."

Even at what is now a towering price of $30, Sears (SHLD) was a dumpster fire in the making.

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