Sears Holdings (NASDAQ:SHLD) revealed in its filing with U.S Securities and Exchange Commission, various points regarding many items that can attract the fancy of shareholders. It revealed that it will be selling off 200-300 of its stores and shift the revenue to the real-estate investment trust fund which was recently created, or Sears (NASDAQ:SHLD) will simply shift these stores to this fund and still operate it under one or more leases.
Sears (NASDAQ:SHLD) claimed that this sale will enhance the company’s ability to increase its liquidity. It expects to distribute rights to shareholders, of common stock or other equity possessions of the real estate trust fund and this will be on pro rata basis only. Sears (NASDAQ:SHLD) collected 102.5 million in sales from the stores in Cupertino California. It will be operating as a full line store for another year. Considering the fact that it has already announced 625 million dollar offering of rights, Sears (NASDAQ:SHLD) won’t be putting up any subscription rights for unvested shares to holders.
The holders of unvested shares will get a cash award for all rights these holders have had to receive subscription rights to purchase units. The CEO of the company will receive an award for additional shares of common stock. Following this decision, Sears (NASDAQ:SHLD)’s shares rose by 48 percent. The investors were backing out of on Sears Holdings (NASDAQ:SHLD) when the quarterly EPS and revenue came out cold but now they are applauding Sears Holdings’ (NASDAQ:SHLD) move to sell off its stores for the trust fund.
It goes without saying that Sears (NASDAQ:SHLD) was forced to make this move because the company was simply out of finances. The core business of Sears Holdings (NASDAQ:SHLD) was simply going up in smoke. Revenue was waning to almost nonexistent and the company had become a shell of its former self. The investors were ready to dump the stock when Sears Holdings (NASDAQ:SHLD) in an act of desperation decided to sell off its stores, simply to raise cash. That would hold the investors around for some time.
Sears Holdings Corp. (NASDAQ:SHLD), in this month, reported that it currently holds 330 million dollars as a credit facility. The past three months cost Sears Holdings Corp. (NASDAQ:SHLD) 630 million dollars and 497 million dollar losses were reported earlier this year. Around the time of the second quarter results, Sears Holdings Corp. (NASDAQ:SHLD) had 839 million dollars, now it is left with only 330 million dollars.
The company’s CEO claims that the operating business has stabilized and Sears Holdings Corp. (NASDAQ:SHLD) will be on track in the next few months for sure. We hope that is actually the case because there is a strong feeling looming around that Sears Holdings Corp. (NASDAQ:SHLD) may go completely bankrupt. Sears Holdings Corp. (NASDAQ:SHLD) should hope the investors don’t get the wind of this news or else they’ll start dumping the stock cheaply. Nobody wants to become a part of a train wreck.