Sears Holdings (SHLD) shares rose 31% on Friday, and at first glance, one might think that is an indication that the stock is in recovery mode. However, the stock flew up on news that CEO Eddie Lampert is going to transform it into a REIT (real estate investment trust) structure. As Daniel Jennings, a Seeking Alpha contributor commented, “Lampert is literally selling the company’s assets to himself and investors.”
Those who held Sears stock benefited from the pop, but it is not going to be long lived. Sears is not attracting new customers or performing well at all. It revenues are falling through the floor, its debt to equity ratio is $8.406% and it is closing stores at a dizzying pace. Jennings says Sears is in a “death spiral, ” and that Eddie Lampert doesn’t really care about running a department store, but on wringing every penny he can out of Sears’ assets.